I won't pretend to know enough to definitively say what combination of materials and/or method of production is most environmentally friendly, or even that I care enough for it to influence my purchasing decisions.
What I do know is I want a quality leather case and just got one from Andar last week. Loving it so far.
If Apple's position is to stop producing leather accessories, for whatever reasons, and to now stop producing FineWoven accessories, for whatever reasons, more power to them. Presumably, they now understand that regardless of your virtues, people still want what they want.