I think that anyone depositing in a bank in another country needs to realize that they are taking a risk. In the US and Canada there are accounts that are insured but the governments and those that are not there is a limit on the size of those accounts and they do not pay high interest. In the US I do not thing you can get 2% on an insured deposit, much less 5%.   

It looks as though the UK and the Netherlands took it upon themselves to bail out foreign depositors, other than to use the Icelandic legal system to make the assets of the guilty banks available to creditors, morally Iceland seems to have no obligation to make good on that unless specifically foreign accounts were insured. This aspect of the crisis seems to be entirely caused by the British and the Dutch.

On the other hand, morals and principles aside. If Iceland wants to have favorable, trade with the EU and other countries who call themselves free market but bail out bankers. The people will have to pay.