Insanity, it's really nothing to do with that. Read the Wikipedia article Qole suggested?

I can't see how it's all very petty; I disagree with Mozilla's (and Joerg Schilling's, in a similar, but completely separate, matter) decision on what steps are necessary to protect their brand, though petty seems the wrong term, but Debian's actions were quite proper. (And it should not be surprising that Mozilla does not share your concern for Linux distros being more widely accepted/used; Debian probably isn't as concerned about it as you two manage to sound, but at least has some interest.)