The retraction was certainly over the top. If they were protecting the source will need to be investigated.
Something like this can be the straw that breaks the camels back and cause the house of cards to collapse. Fresh Out of Metaphors.
No, I don't think it was. He said he was sorry that he hadn't gone through the usual vetting procedure, not for what he said. It had strong apology at the front, but was essentially a take-back at the back end.