The Michael Corleone analogy goes far. Apple uses the organized crime / drug dealer method of security: if you do something they don't like they terminate you (pun intended) to scare everyone else into complying.
> I did describe this to Steve Jobs the night of the iPad introduction and he said “so it’s no big deal.
If Steven Jobs does not think that firing someone is 'a big deal' then he's a really lousy employer. Firing someone, especially when it is over an issue like this is always a big deal, even if only to the person fired, and you can't just make light of it like that.
I believe he's referring to Woz being shown the device being "no big deal", not firing the guy. Of course, this leads to the question of why the guy was still fired... though it's quite possible/likely the firing didn't cross Jobs' desk.
The interesting thing is that this wasn't talked about that much. I remember thinking it was funny that Steve Wozniak would get a 3G on the launch of the wifi-only iPad but didn't think more about it: all versions of the iPad had been presented long before so it was nothing new, just funny that Woz would get an unreleased product on that day.
So, if the engineer did get fired over this, I would have to go with the "culture of fear". Or at least, in this case, it seems that Apple stuck to its policies instead of figuring out the damage done. (which was none)