I can only imagine how hard it is to have fair negotiations when a prospective employee applies at a competing company only to be told "no thanks" simply because of a hush hush agreement between the executives of said companies. This flies counter with Google's "do no evil" statement and certainly doesn't paint a positive posthumous picture of Jobs.
I'm tired of people bringing up 'don't do evil' EVERY time Google does something they dislike. New search results using personal targeting - EVIL! Anti-poaching agreement with Apple - EVIL! Closed down a bagel cafe next to my cubicle - EVIL! Can we all agree that the word Evil has a more sinister use - ie knowing endangering lives, environmental damage, maybe closing press freedoms? And, therefore, we should be more…
The point of "Don't be evil" is to hold ourselves to a higher standard, and not less us take the easy way out. That, IMHO, is what made Google great in the first place.
I'm not going to comment on the specific case here - I don't know the facts - but the reason for "Don't be evil" is as much motivational as moral.