I'm not sure the story of how the FBI broke into the phone is out yet. There is some suspicion, I think, that they were helped by a security service/company from outside the US, but how true that speculation is I don't know. We'll have to wait for the FBI to make an official statement, if they fell so inclined. At any rate, I don't think there's anything particularly fishy about it.
Mikey -- the principal reason for Apple's position is that, while there is no doubt that accessing this person's phone would be beneficial for national security, the manner they were asked to do it was not. Phone security protects the innocent along with the guilty, and compromising that security deliberately would therefore endanger the innocent (who might want to protect, say, private life or private emails or just anything personal). More to the point, the "back-door" they would have had to create wouldn't just be open-able by the FBI, but by everybody -- including people who would love to use any information they can get of a person's phone for criminal activities of all sorts -- right the way from basic blackmail up to full-scale fraud and identity theft. In that sense it's vital to try and preserve general phone security where possible.
I suppose a secondary point is that it's not clear that deliberately sabotaging Apple Security would achieve much anyway. Certain apps, many of them freely available, provide their own security anyway that's independent of Apple's systems. So breaking the first one would leave the second still secure, thus compromising Apple's general security while leaving anyone so inclined, including the intended targets of criminals, free to keep what they are saying private anyway. From a purely business viewpoint, it's hardly in Apple's interests to release a system and software that are deliberately broken when competitors aren't subject to the same court order.
What it was never about, then, was protecting terrorists. Apple wanted to protect their customers' privacy -- and, of course, their reputation as a secure service.