IANAL but I understand that what Iceland did would not have been permissible under EU law. That is part of the reason why Ireland, for example, took the path it did, in relation to the bank bail-outs.
However, what Iceland did was still unilateral. They didn't ask for anybody's permission and didn't expect their decision to be accepted.
Laws and treaties still need to be enforced and those countries are still sovereign. What happens if a country does something that is against EU law ? At worst, they may be expelled from the EU.
So it's really a matter of comparing the advantages of EU membership to the cost of the path of action that was taken.
It's still a political decision.