There's nothing appalling about this. Apple has every right to defend its patents, just as Palm has every right to attempt to poach Apple's employees. Jobs offered an agreement and Colligan declined, so Steve threatened to take alternative measures to discourage Palm from poaching its employees.
If Palm had agreed "we won't hire anyone coming from Apple", that would be illegal under antitrust law. If they had agreed not to actively recruit Apple employees, that might be OK but would still look sketchy.
Agreed on the former. I don't think the latter would be sketchy considering anti-soliciation is quite often enforceable throughout the USA. Just not in California, so you resort to other means (that, yes, might run afoul of antitrust, but that's what you do when you're competing...)
