>a negative ruling wouldn't have been an insurmountable problem
It was setting them up for a precedent-setting legal decision in a higher court that may very well have not gone the government's way.
>they couldn't proceed without lying to the court
You're assuming that this mysterious third party that showed up the day before the initial hearing with a method to crack the phone actually exists, and that this method was successful. That is certainly a possibility, but it is also possible that they never intended to see this through and hoped that they could intimidate Apple into doing exactly what they wanted.
It was setting them up for a precedent-setting legal decision in a higher court that may very well have not gone the government's way.
>they couldn't proceed without lying to the court
You're assuming that this mysterious third party that showed up the day before the initial hearing with a method to crack the phone actually exists, and that this method was successful. That is certainly a possibility, but it is also possible that they never intended to see this through and hoped that they could intimidate Apple into doing exactly what they wanted.