As I said, it's a completely reasonable conclusion in the context of the case. However it is not based on evidence that Apple was aware of the alleged collusion between publishers. I've read the district court ruling, and I cannot think of a way that Apple could successfully enter the market without falling to logic used by the district court to prove this case.
Fair enough. I think the evidence was pretty unambiguous, and so did the DOJ, the Southern District, and two of three judges on the Second Circuit, but I suppose reasonable minds can differ.

I didn't say competitors. I said competition.
I don't know what that means. Neither does anyone else for that matter. That's why the Supreme Court adopted the current "consumer welfare" approach - there was a general realization that "competition" could mean anything. To make it concrete however - the things you mentioned are broadly legal.
Then why is predatory pricing illegal?
Selling below cost is legal. Selling below cost,
AND then raising prices can be illegal. That's what makes something predatory pricing. This is extremely rare however (as the FTC points out).
Your competitor can sell below cost, run you out of business, and until they raise prices above market levels, nothing illegal has happened.
i'm probably just splitting hairs here. My view is that the antitrust laws are designed to maintain competition in order to protect consumer welfare. Not to protect consumer welfare at the expense of competition.
Antitrust laws don't protect consumer welfare at the expense of "competition", but they do often protect consumers at the expense of competitors. As I noted above (as as the Wright article I linked earlier discusses, "competition" is a very broad term that can mean anything, which is why courts have narrowed the inquiry onto consumer welfare.
For example, the goal should be efficient pricing, not lower pricing. Otherwise, why would the DOJ allow any pricing over free? Free is better for consumers!
This really isn't that complicated. From the perspective of antitrust law (and mainstream economics), "efficient" pricing is whatever is reached by competitors
without agreement between each other. This means pricing can go so low as to run all but one competitor out of business, and that's fine if it's done in response to consumer demand.
The DOJ and FTC don't get involved in setting or regulating prices (with limited exceptions). They're not trying to enforce low prices. They're trying to enforce market prices - i.e., prices reached by sellers acting independently. If the publishers had independently moved to the agency model, then there would be no issue. It's the fact that they had an agreement to do it that caused the issue. This really isn't that tough a burden. Don't agree on business models or price with you competitors, and don't facilitate such agreements.