And started installing *zip drives* in macs.
At the time, that wasn't a bad move. They were the dominant media at the time and were skyrocketing in popularity.
going from 1.44MB -> 100MB was thought of as such a big leap that people would have plenty of time to adjust.
The thing they didn't count on was the rapid expansion of the power of the LAN. When zip drives came out, 10Mbit has been the standard for going on 10 years. 100Mbit was on the rise, but people generally thought it would be reserved for core switches. ( heck I remember the day my department interconnected to our local backbone via 200Mbit full duplex etherchannel... we thought it was amazing )
Anyway... what people hadn't counted on where the new kids on the block.
Juniper, Netgear, linksys. The latter two revolutionized inexpensive layer 2 switches. In 3 years the world went from 10mbit hubs with 100mbit backplanes to 100mbit switches with gigabit backplanes.
The went from 8K combined caches to 8K per PORT caches.
Tiny little 8 and 16 port switches having more horsepower than the massive central behemoths they were replacing.
So everyone went on a wiring frenzy.
This of course would basically repeat itself on the internet a few years later, once DSL/Cable subscriptions got large enough.
A similar thing happened with CD-Rs... once CD-R media got under $1 a piece, people stopped giving a damn at all about floppies or Zipdrives.
I used to have 25 packs of CDRWs I ended up having to give away because people wouldn't even bother to erase... cheaper to use once and toss it.
All in all I think Apple made the right call. I think it would have been impossible to predict how fast that media would become obsolete ( and now All media basically, with a slight footnote reserved for thumbdrives etc )