I don't think it's wrong for a coach to stick up for a player, and in a "normal" context, I don't think Pflugrad's comments should be viewed as inappropriate (and certainly not worthy of dismissal).
The problem, though, is that the comments were made at a time when a complaint had been filed with the DoE against the football team, and Pflugrad's comments have the potential to give the DoE additional ammo against UM. Now, when you peel back the onion and look at the merits of the case against JJ, you reach the conclusion that Pflugrad's comments were probably correct, so in that sense, you might say that Pflugrad has been vindicated. However, as I (and I suspect others on this thread) know, when an agency starts investigating an institution, they don't always "peel back the onion" on every single piece of evidence they have. In writing their report, if the DoE feels that it can build a case against UM for creating a "hostile work environment," one can easily envision Pflugrad's comments appearing as part of a litany of examples of "conduct creating a hostile work environment" by UM officials, without necessarily taking into account the fact that the player was ultimately acquitted. I'm not saying that's fair or right, but it's sometimes the way investigative agencies operate. Thus, while Pflugrad's comments were not "wrong," they do have the potential to cause some harm to UM.
Engstrom's primary concern at the time, I assume, was managing the NCAA and DoE investigations (I don't recall whether the DoJ investigation had started yet). I don't know what had been said internally between Engstrom, O'Day, Pflugrad, or anyone else, but I suspect some version of the discussion goatcreek described probably happened -- certainly in the face of the various investigations, it would be extremely important to have a coordinated message to the media. We'll probably never get an official response from UM as to why Pflu was fired, but I suspect it was because his comments were viewed as having the potential to hurt UM with the various investigators, and firing him was a form of damage control. I don't necessarily agree that it was the right move, and I do sympathize with Pflugrad (and respect him for standing up for his player), but I also understand the thinking behind it.