Justified or not doesn't really matter. If your entire company threatens to quit then you made the wrong choice. Hopefully many of the old board is gone because a blunder of that magnitude shows extreme disconnect.
Sounds more to me like they were naive when it came to the inevitable PR war that would follow. They should have come out guns blazing with all the dirt they had. Instead they said very little and it just appeared nonsensical.
Except that I don't think it was for PR reasons that almost the entire company sided with Altman. I'd say it has much more to do with the profitability and the goal of continuing to work on interesting problems with the best resources.
Humanity would prefer no cigarette companies but sure, Philip Morris employees and shareholders would love to still have it. Remember that "OpenAI’s mission is to ensure that artificial general intelligence (AGI) benefits all of humanity." If their for-profit arm is obstructing that...
Look if you think the whole company should be shutdown, then say that.
But don't pretend like any of the employees are going to go along with that. Just admit that the goal is to actively sabotage the company and shut it all down.
Then, all those employees can understand what you want, and they can go work for Microsoft instead, doing the exact same job that they were doing before, but now without the board sabotaging the company.
First, my statement was a hypothetical that shows its fairly obvious in the abstract that just because a group's activity is beneficial to themselves doesn't mean humanity needs to tolerate it, if it's at the expense of everyone else. Hello cartels, carbon emissions, etc.
When it comes to this specific case, the board did not think the mission of "AGI benefiting humanity" warranted shutting the company down. (they believe that being in the lead is better steering than Google / FB / etc.) But they also believed that Sama was sabotaging the safety aspects that would lead to the better steering of AGI for humanity.
The board expected people to have joined OpenAI in support of the mission but Sama sabotaged that with the $1m+ pay packages that meant these people prioritized their personal wealth. The Google founders had talked about how hard it was to ignore financial incentives, a majority of employees were in uproar every time the stock flatlined for too long.
Board's priorities: some group having the best chance of AGI benefiting humanity > Company shutting down > OpenAI makes humanity worse via AGI
The employees should've understand what the OpenAI mission and board's duty was the moment they joined the company. If this wasn't one of the first topics in interviews, then Sam sabotaged the company's mission.
They made the right choice by firing him, and the wrong choice by reinstating him. If firing him had blown up OpenAI, that would have been better than leaving him in charge.