Insubordination or not?

I work in North Carolina, an employment at will state. The company is privately owned and the owner works everyday and of course, has the final say in all things. A co-worker was recently fired for insubordination. I don't believe she was being insubordinate. In that department, there is a manager, a supervisor and 7 employees. The supervisor speaks horribly to all the employees, but is not reprimanded because she is friends with the manager. We've had 3 people quit to get away from her and now this one was fired even though she went to the manger to discuss the ongoing problem. The employee was written up 10 months ago for insubordination against the supervisor and told if she was insubordinate again, she will be terminated.

This employee was never a problem, worked hard, excellent attendence and got along with everyone in the company. Very well liked by everyone except her supervisor who viewed her as a threat. Two weeks ago, the supervisor was instigating the employee, nit picking her work even though there was nothing wrong with it. The employee brought the problem to her manager who told her to "suck it up and deal with it". The next day, the supervior was talking to others in that department about how the employee is the only one in there she can't get along with, etc knowing the employee can hear everything that's being said about her. She spoke up and informed her supervisor that she can hear her talking about her to her coworkers and doesn't appreciate it. The manager took the employee into the owner's office and had her fired for insubordination. Nothing is being done or said to the supervisor about her own unprofessional behavior. I don't believe asking for respect is insubordination. Thoughts???