While I agree in theory that it should be okay to re-enter a game or app if major changes have been made, I think the fact is there's abound to be disagreements over what constitutes "major changes." The coder may say, "No, there's major changes here, I worked for months improving the code," but someone else might not think the changes are enough to be considered "major." So it's better to simply not allow the same work to be entered twice. This makes the contest more interesting anyway, it's always nice to see all new works entered than just the same things.
At the very least, entries that placed in the top three should not be accepted as re-entries.
Personally, I think it would be nice if only games or apps that have never before been released at all were allowed in the contest, but I guess that would probably limit the number of entries too much.
...word is bondage...