As much as I despise patent litigation, I can understand Jobs' point of view: when so many people change from one company to another, a lot of knowledge will go with them. One could interpret Jobs' threat of just a means to protect Apple's intellectual property. To ensure that Palm doesn't use stuff that Rubinstein et al developed at Apple.
It's just far cheaper to threaten other companies than to keep your workers happy. It's not like there aren't legitimate ways to retain your people.