The OP is being asked for a password. I don't think this indicates a bad sim. Either a restore, if that will reverse the action (I don't know), or a call to Apple to find out how to retrieve the password.
Found out how to do it. In your account on att web site under your device, tehre is a section on unlocking the sim card when a puk code is required. This is an FYI for anyone else that has this problem.