Although this is characterized as "hard nosed negotiation," I think it's important to note that he didn't really have to do anything underhanded, and he wasn't really taking anything from anyone. The reason Steve Jobs "won" that negotiation is that he had a well thought out plan that was good for everyone, and he was able to explain that to the people he was negotiating with.
The only really "hard nosed" point is that when News Corp asked him to (essentially) give them more money, he said no, the deal is already good enough. It's so good you don't even want to work with anybody else, so why are we having this conversation?
That's not reality distortion, because it was true. There really was nobody else at the time, except Amazon, and they were already working with Amazon, and this deal only asked for the rights to sell books at an even higher price.
When companies suck at negotiating, it's because they fail to create the kind of situation where the other people need what we're offering. It doesn't matter how good a negotiator you are, smart people will see through a bad offer.