Why was upside down from the user's perspective an issue? Because the design group noticed that users constantly tried to open the laptop from the wrong end. Steve Jobs always focuses on providing the best possible user experience and believed that it was more important to satisfy the user than the onlooker.
Obviously, after a few years, Steve reversed his decision.
Opening a laptop from the wrong end is a self-correcting problem that only lasts for a few seconds. However, viewing the upside logo is a problem that lasts indefinitely. More here.