any ideas how to resolve this?
Nevermind, I followed this tutorial and it seemed to work!
We're currently experiencing exactly the same error. There's an open case with Adobe at the moment to try and ascertain if it's DPS or iTunes Connect that's causing the problem. I'll update this thread as soon as I have more information.
We've finally got some answers on this issue.
It isn't very clear from the Digital Publishing Suite marketing materials that you can only publish to Newsstand if you're a Professional or Enterprise DPS user.
Those who subscribe to CC can only produce single "Custom Viewer" apps outside of the Newsstand App. Hence the only way around the error above is to uncheck the 'Newsstand' option during the iTunes Connect part of the publishing workflow.
Hope this helps anyone else who comes across this rather unhelpful error message.