VLC, from what I've read, is still in limbo from being updated and waiting for Apple to sign off on it's blah blah blah so it can be reinstated to the app store. Something happened over the summer, a bunch of legal mumbo jumbo that I care nothing about and don't want to read...so the company that makes VLC had to remove the app from the app store and reconfigure it and is now waiting for Apple to give the thumbs up.
In the mean time, there are alternatives...one that I find BETTER than VLC which is called Infuse, and the one my wife sticks by called PlayerXtreme (she's used it on her iPad for years now). Both of them function in almost identical ways to VLC and give some better options.