The real issue is that he was appointed CEO of a non-profit... dependent on the generosity of others for its survival. Controversy, like this is kryptonite to all non-profits. Eich gets points for stepping down rapidly.
He was CEO of Mozilla Corp (for-profit) not Mozilla Foundation (non-profit).
However, the majority of people will not know or care about the difference so, in matters such as these, the difference is negligible.