Yes, clearly not good - especially as it's been going on for a while and the cause (or not) is still uncertain. Chemicals have been 'implicated' at another Apple supplier.
The electronics industry has never been particularly green or clean. There have been concerns about workers' health in Scotland in the past.
Anyone in 'the west' who buys 'stuff' - cheap clothes, bikes/bits, consumer glitz can be sure they have bought something made in places/conditions they might not approve of - unless they do a lot of research.
Large companies are lied to (even if they aren't turning blind eyes). Then there are issues of mining of scarce resources, transport energy issues - never mind the electricity footprint of the Internet. ('Solution' - renewable energy with all the 'waste' heat used for district heating. And that'll be when???)
There are certainly no simple/easy answers to being 'ethical' and having 'low impact' lifestyles.
I believe that Apple is more concerned about 'environmental issues' than many big companies (even if it's only because Greenpeace had a go at them a few years ago.) Likewise I'm sure they will be concerned about the suicides - not just because it's bad PR.
(UPDATE- http://www.appleinsider.com/articles/10/05/26/apple_looking_into_foxconn_suicides_says_it_is_saddened_and_upset.html)
There are many reasons for not buying things like iPhones, but I'm not sure if there are any more ethical brands/products.
Though there are plenty of alternative options.
Just announced - http://www.appleinsider.com/articles/10/05/25/dell_announces_streak_a_5_inch_android_based_ipad_competitor.html