What balance though? From everything we've heard post re-org it doesn't seem like they worked much together. And this
Fast Company story seems to indicate that when the first iPhone was being worked on only a select group of people had access to the UI and the version of the software that Ive's ID team had access to was very crude. And the software team was testing stuff on old Macs. So basically you had hardware being designed without knowing what the software looked like and vice versa for the software. Now you look at a product like the 5C and its apparent that the hardware and software were designed in concert. And in the future I think we'll see even better collaboration between hardware and software.
As far as Forstall being the right man, what exactly makes him the right man over Cook? What future vision did he ever articulate for Apple? And couldn't one argue that after the introduction of the AppStore iOS stagnated under him? Apple is still playing catch up to other mobile OS's in terms of features.