Perhaps it was because he was willing to lie in court to keep from spending a little pocket change on a child that he fathered (If you don't want the kid, don't have the sex).
As to him being a smart business person.
Would a smart business person refuse 5 Billion dollars, let alone threaten to spend 40 Billion more just to prove a point? Getting paid for each Android device made would have been the smart business decision. A settlement gives profit with no chance for loss while a lawsuit costs loads of money and only holds the possibility of profit and the profit granted will just be the money that would have been paid before plus a bit more (which is mostly spent paying the lawyers) because Apple couldn't prevent Android, Apple could only demand payment for use of patents.
As to Steve Jobs as a moral person, one of the first things he did in his career was steal a few thousand dollars from Wazniak. Just a little later, he stole the WIMP/mouse GUI idea from Xerox. After he was fired from Apple, he was so full of himself that he decided he could recreate the Apple's success (not realising that the success of Apple's earlier years was due to amazing engineers such as Wazniak and the company would have likely been a success without him). The result of this belief was the creation of NeXT Computer inc. The company blew through millions of dollars of investors cash without achieving success. Nobody was buying NeXT computers nor NeXT OS's. In the meantime, Apple was looking to replace the (not so gracefully) aging OS9. The replacement in consideration was BeOS, the most advanced OS of the day (nothing was even close). For example, watch the Beos demo below (running on two (yes it was natively multithreaded) pentium cores).
Around this time, Apple rehired Jobs. In an attempt to cover his multi-million dollar failure, Jobs stopped all talk with BeOS and instead bought NeXT (BeOS was bought and shelved by Palm, so I guess it's HP's now). Just a few short years later (2006), Jobs was involved with the famous Apple stock option scandal. Jobs decided that employees given stock instead of bonuses would work harder to keep from losing money due to bad stock prices. Realize that Jobs has been in the business world for almost 30 years and knows (I don't see how he couldn't) about what can and can't be done. What he then decides is that all stock options would be granted at the end of the year, but the accountants would look over the stock values and grant the stock options (by backdating them) for the day when the stock price was the lowest. While I find it hard to believe, Jobs was let off the hook because he claimed that he didn't know it was illegal (I can't believe that not one of the accountants at Apple told him that cooking the books was illegal).
Fast forward a couple more years and we see a foolish Jobs refusing real medical treatment for years for a cancer that is almost 100% curable and instead opting to try alternative remedies until the extremely slow-growing cancer has become systemic (Here's a great write-up from a researcher specializing in the type of cancer Jobs had). After Jobs had his pancreas removed, he lied to investors and employees by saying that he was cured. Despite the systemic nature of his cancer, he still (supposedly through legal means) was placed on a transplant list and received a liver (which probably resulted in someone else dying because he took their liver).
Aside from these and other Job's actions which were either illegal and/or immoral (depending on moral perspective perhaps), he was a fairly boring person with anger issues (perhaps stemming from his deadbeat dad).
He sold an image to his customers, that is all.
The market for high-end portable devices has been around since the 90's. The only part of the device that could be viewed as revolutionary in any way (and there were others) was a capacitive touch device. Nokia and others had considered capacitive screens (remember, Apple just bought the screens; another company though that they were good enough to waste R&D on and then waste production resources on) as a problem. The problem with capacitive screens is that stylus' don't work well with them. A stylus is much faster for quite a few Asian languages and Asia is a huge market. The other factor is that a finger is not as precise. That said, many companies were playing with the idea of finger UI's. The one thing that Steve did with adopting the capacitive screen is to make people believe that resistive screens are bad when in fact the current generation of resistive screens are better in that they have the same durability as capacitive (due to using glass), they have the capability of using precise stylus', and they allow for variable pressure (capacitive screens can only sense on or off, not how much pressure. Pressure is, at best, guesstimated based on the size of the contact area which leads to inaccuracies for people with different sized hands).
As for a revolutionary OS, almost every idea was already used by some other company at a previous time. Further, Android, WebOS, and WM6 were already in the pipes and Maemo (later merged with Meego) had been shipping since 2005.
It is ludicrous to believe that a tech company that invests as little as Apple does into research could develop ALL the mobile innovation of the decade. The industry was well aware of the future of smartphones as touch devices long before Apple released the iphone.