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Textastic offers syntax highlighting for many languages including PHP, but it doesn't include compilers or interpreters due to restrictions of iOS.

You will notice that all apps that support running code - like Kodiak, Codea and Pythonista for example - do not have file download capabilities. So, if I wanted to add the ability to run code in Textastic, I'd have to remove FTP, "Open In", WebDAV, Dropbox and all other means of sharing files with other apps.

This is what the iOS Developer Program License Agreement says:

3.3.2 An Application may not download or install executable code. Interpreted code may only be used in an Application if all scripts, code and interpreters are packaged in the Application and not downloaded. The only exception to the foregoing is scripts and code downloaded and run by Apple's built- in WebKit framework, provided that such scripts and code do not change the primary purpose of the Application by providing features or functionality that are inconsistent with the intended and advertised purpose of the Application as submitted to the App Store.

These are the relevant points in the App Store review guidelines:

2.7 Apps that download code in any way or form will be rejected
2.8 Apps that install or launch other executable code will be rejected

That's a limitation that is imposed by Apple, sorry.
This works for me in the latest version of Textastic. Maybe there is another part in the file that causes this problem?
In the preview window, you can enable Firebug, but that is really only useful for inspecting elements because it is loaded after the page is loaded and JavaScript is already executed.

Did you try to reference it directly from your HTML as the first script as described on the Firebug Lite site? http://getfirebug.com/firebuglite#Stable

There are certain limits even then. Since Firebug Lite itself is written in JavaScript, it might not be able to catch errors if the site has syntax errors in JavaScript code.
Currently this is not possible, sorry. If you ran Mountain Lion, you could use this feature to download the last compatible version of the app: http://support.apple.com/en-us/HT201377

Unfortunately, this does not work on Lion.
That's actually the default behavior of all text editors that use the standard NSDocument architecture of OS X, like Apple's TextEdit or Pages and other apps like iA Writer.

Here is an Apple support document that explains this feature in detail: https://support.apple.com/en-us/HT203659

This is what Apple suggests to disable this feature:

On Macs, you can use either of these methods to stop the app from saving your document to iCloud:
  • Turn off Documents & Data: Choose Apple () menu > System Preferences, click iCloud, then deselect the Documents & Data checkbox. When you turn off Documents & Data, the iCloud Document Library no longer opens for any Mac apps that use Documents in the Cloud. You can continue to upload and download documents using the iWork for iCloud apps at iCloud.com.
  • Save the document to your Mac. Your edits will no longer be saved to iCloud, and your previously autosaved document will be removed from iCloud.
iCloud sync on iOS 8 still does have occasional hiccups - not just in Textastic, but also in other apps including Apple's. When I had problems like this, it often helped to reboot the device. It looks like the iCloud sync process sometimes gets stuck and a reboot restarts it.

It can also help to edit a file that didn't upload as this triggers another upload.

This *should* all work automatically, but unfortunately, sometimes it doesn't.