In DC this is called the non-apology apology where you express regret for someone else's error.
The real apology version is: "I apologize for my [mistake|error|imprecision|lack-of-clarity]".
The Tylenol Scare showed that massive overcompensating action is how you recover from a PR hit (http://www.aerobiologicalengineering.com/wxk116/TylenolMurde...). You cannot earn back goodwill with half-measures.
Perhaps PR has the language to help financial types appreciate the value of good ethics.
I think software development has had similar problems making the case for good s/w engineering practices being financially sound and not just an nice idea.
The criticisms of the original project, at least the ones I read, didn't actually do this. Instead people were complaining because it reminded them of something unethical that someone else had done, or they didn't think it fit Seth's personal brand, or they were afraid he would do something unethical in the future, or they never liked him to begin with.
Now if people are saying, "you violated X rule of ethics" then it's really easy to apologize for doing that. But in this case that's not what people were saying, so how exactly do you apologize to those people? Especially since in the end the reason Seth backed down was probably at least in part because his personal brand is worth more than the money he could make from the project anyway, regardless of whether he was right or wrong.
From Wikipedia: "A protection racket is an extortion scheme whereby a powerful entity or individual coerces other less powerful entities or individuals to pay protection money which allegedly serves to purchase protection services against various external threats, usually violence or property damage."
Powerful entity: Brands in Public with their authority domain and SEO ranking
Purchase protection services: if you pay BIP, you can edit your page, thereby protecting your reputation.
External threats: in this case, not violence but the PR damage your company might suffer if negative/false information appears on the front of your BIP page.