The question is actually "Is it appropriate for someone who takes active steps to treat some people as undeserving of basic rights[1] to take the ultimate leadership role in a diversity focused company?"
That answer is no.
Going back to your "negotiation" statement - he was given that option! The pichforks didn't truly come out until the number of his non-answers on the issue. Someone saying "we support diversity" doesn't sound right when that can be instantly rebutted with "Then why is your company run by someone who donated against LGBTs?"
It looks bad for Mozilla, and there's no good answer for that question - really!
Eich had three valid options from that point on:
* He could repudiate the donation and this would have evaporated overnight. Those views were apparently important enough to him to prevent such an option.
* He could not do so and stay, and Mozilla would suffer due to the volume of people who stated they would not work for or with someone who did what he did.
Two things to keep in mind: People are/were angry at Eich for his actions, not his thoughts. His thoughts are not conclusively knowable, his actions are.
Also remember that Prop 8 passed, and it took another 6 years for equal marriage rights to clear in California as a result - were I living in California during that time, I'd have felt pretty scandalized too, moreso if I were actually working for Mozilla at the time.
* He could not do so and move on. This was the chosen option.
[1]: http://www.afer.org/blog/14-supreme-court-cases-marriage-is-...