While the issue is supposedly just with iCloud Drive it becomes more complicated than that due to the fact that destinations sheet in iOS includes iCloud Drive, and cannot be edited by anyone but Apple. This means that while Apple is telling the company it just has to remove iCloud Drive they've made it impossible to do so without removing all other content upload options as well. Panic has released the following gif explaining the problem visually.
...at Apple's request, we had to remove the ability to "Send" files to other services, including iCloud Drive.
In short, we're told that while Transmit iOS can download content from iCloud Drive, we cannot upload content to iCloud Drive unless the content was created in the app itself. Apple says this use would violate 2.23 - "Apps must follow the iOS Data Storage Guidelines or they will be rejected" - but oddly that page says nothing about iCloud Drive or appropriate uses for iCloud Drive.
Panic Inc. hopes to return this functionality to the iOS app in the future, and wants to make it clear that it doesn't blame everyone at Apple for this frustrating development. Head over to Panic Inc. to read the full blog post about the situation.
H/T to @macguitar