Of course, they were responding to rumors that Microsoft's Bing search engine would replace Google on the iPhone, and common sense will tell you that it'll be a cold day somewhere very warm before Apple chooses to partner with Microsoft over Google. If push came to shove, Steve would probably create his own search engine before partnering up with anyone in Redmond.
But maybe the Google folks are also playing politics a little here -- Steve is not an unreasonable man, and he is known for being direct, especially in personal communication. Jobs can complain all he want in an internal meeting, but in public, it's probably best that Google takes the high road. Apple and Google may eventually have to show down over cell phones, but until they absolutely have to, it's probably better if they both play as nice as possible.