Google are the one who licensed their app to Apple, maybe after the initial agreement expired, google asked too much and apple decided that it wasn't something they were willing to do.
IMO it was also very likely something Jobs wanted too. I don't see him and his way of leading as being one to allow the folks at Google to control maps that as already noted, is an integral part of the iPhone consumers use of information.
Ever since I can remember, there have always been some pain points around apple products and computers. The upside however is even with a glitch or hickup here and there, the ultimate experience for users as a whole has typically been very positive.and they have always improved and grown stronger because of them.