I suspect you could be right. From the FBI's perspective better to leave the issue unresolved than to go to court and have it resolved in a way the FBI didn't like. If Apple won it would reduce the FBI's options not just with Apple but also with other 'less principled' manufacturers.
On the other hand, the withdrawal also creates the impression Apple's encryption might have been broken. Apple will need to at least be seen to upgrade encryption in iOS9.4 that could deal with the exploit.
The gripping hand is the encryption war goes on forever.