There were some vague reasons behind it. Apple claimed it improves battery life for mobile devices (possibly because it is 'dumber') and it's based on the mp4 container format used by other Apple-preferred formats.
Is there a source for that claim? I ask because FLAC is generally considered to be faster for decoding.
My guess is the MP4 container is the only reason they went for it (that and possible business/ecosystem reasons).
On a positive note, Apple later released a reference ALAC implementation under the Apache 2.0 license, which includes a patent grant, so the damage is mostly limited to consumer annoyance.
The MPEG-4 format was based on the QuickTime format, so it shouldn't be any surprise that Apple prefers to go with an MPEG-4 format even when an acceptable alternative is available. The reality is that Apple doesn't support very many alternatives to MPEG-4 formats, and they probably wouldn't support MP3 if it weren't for the fact that they wouldn't have been able to take a significant position in the market for digital media players without MP3 playback. The same will probably never be the case for Ogg or FLAC.