Q: findmyiphone is inaccurate... why?

If the iPhone did not have a clear view of the sky, then the gps could be less accurate.

This is not uncommon.  Accuracy depends on the ability to "see" the GPS satellites.

If you were inside and the device did not have a clear view of the sky, it may not have been able to receive GPS satellite signals. In that case, location would be based on wifi node location in Apple's database, and/or cell tower triangulation, and/or Bluetooth beacon. Any of those can be highly approximate though.

I don't see why Apple would be embarrassed at all. Location information is inherently limited by what is available for the device to derive a location fix from. Other than GPS, which will not be able to work if the device is blocked from receiving satellite signals, most other available methods are only approximatIons.