Joe: hard vs soft has to do with the process of how the ice was made (built up over time) and at what temperature the arena is kept.
For a good example of too soft ice, refer back to 03 worlds in DC and it's puddles.
The ISU seems to have little or no rules governing conditions (the conditions of outdoor events sounds like it was a free-for-all). I'm always shocked by how the ISU books events at rinks of various sizes and then we hear all these comments from skaters about the rink being too small to do thier Lutz etc...
Anyway, hard/soft has to do with the spring in the ice and how much it gives or doesn't give when you jump, similar to the difference between running on concrete vs. asphault vs. dirt (if you jog, you'll know what I mean).
IIRC, Kwan's comments were made at a general press thingy after her skate, and were reported in various sources. The Russian article quoted here had just picked it up from the general press release, not interviewed her separately.