Steve Job's disease unfortunately ate much of his mind, and from the harm done I'd say to the part of the brain involving adult judgment. There is no other acceptable explanation. Early senility doesn't cut it, and any creativity that is left is tainted with childish vendettas (Flash, Blu-ray, glossy screens to name the top 3) and abandonment of cutting edge computers and the creative content producer base that built Apple.
And the sooner Apple admits this with a medical diagnosis and gold watch in hand, the far better off they'll be. As of now, the board is in a mixture of denial and panic. Neither of which will save Apple.
What are they waiting for? Does he have to show up to work naked, or with a loaded automatic weapon?
At the very least shift him off to a toymaking division (to eventually go bust as all fadmakers do) and have a capable grownup who LISTENS TO APPLE USERS handle the computers.