This is one of those stories where I think we are just not hearing the full story.
I have done a lot of PC work, and if someone is upgrading and wants to chuck out the old computer, I will always ask the customer if they want the old data on the computer before I erase it. In this case, the company probably is the customer, so I just don't see any problem asking the company.
Now if the employee was taking photo's in the workplace in contradiction to company rules, and for this company it is a sackable offense, then he probably deserved to be sacked. We don't know what was in the photo's. Obviously the company did see the photo's and what they saw was to them beyond acceptable limits. It is possible that this guy did something really bad, like taking inappropriate photo's of colleagues without any permission, or taking photo's of the companies propriety manufacturing methods, processes, etc without management approval. If the guy did wrong, I have no sympathy.
In general, documents, photo's and emails done on a company computer in company time are a valuable property of the company - they paid good money for it. I do not see why a company owned mobile phone should be any different.
If the phone was on a company contract, I do not think Radio Shack did anything other then proper behaviour in asking if data was wanted before erasing it. Good on them. Sure, this guy dropped the phone off at the store, but it is not his phone, and so he could not authorize Radio Shack to delete the data.
Richard.