They're using OSM - as for Bing, they'd be trading one headache for another. The notion that Apple is doing this to take control of a core aspect of iOS seems to make historical sense given how Apple likes integrating and controlling popular functionality into their products.
Maybe they felt that the data wasn't sufficiently better and that they wouldn't have enough control to make that data better over time. Maybe Bing is profited from licensing the data in a way that would accomplish what Apple wants to accomplish (like the rumored ban on turn-by-turn that caused Google to drop telenav in favor of creating their own dataset).
There are few times that I wish I could have been a fly on the wall in Cupertino. This is one time I wish I could have. The discussions and reasoning that went into this decision must have been fascinating because there is no way Apple was thinking, "Maybe they just won't notice". There were undoubtably a lot of tactical and strategic decisions that went into what we see, and being party to that would have given a lot of insight into Apple as a company.
