The people of Apple could have quit. Many of them did. I suspect that the ones who remained felt the trade-off was acceptable. And Jobs didn't use his power to pursue people and inflict pain on them, so his dictatorial process had very clear limits.
When you're trying to realize a vision, compromise ruins everything. That said, not all visions deserve to be realized, and sometimes compromise avoids a lot of hurt. Jobs's hurt was not especially severe, and his vision was astonishing, so in his specific case I think it was justified; that ruling doesn't extend to everybody else who wants to push relentlessly towards a goal, because many goals are horrible and many pushes are just as bad.