Yes, the wrap was to protect the transparent walls.
Here's a link to a gallery of pictures:
Apple Store, Fifth Avenue Gallery..., one of which confirms that the store is below ground level:
Here's a picture of infidels:
Nice store, nice photos...
So the indignation was a day late and a dollar short? Not surprising. Or perhaps they objected to the "mecca" part? Wonder how many Christians would have murdered people if it had been called Apple Heaven or Apple Paradise? Perhaps we should be insulted by Islamic phrases infiltrating the English language.
Most companies would have just used canvas or plywood, but that's not Apple. They're famous for attention to design details, rivaled only by Sony for that. Given the fact that they're still getting grief over the construction drape a year later, I bet they wish they'd chosen white.