I don't know about Key being fired; I doubt he was. However … Saban didn't make a counter offer to keep him either. That could be interpreted two ways, at least, but I haven't been impressed with our OL play yet. Maybe with time, if Collins survives.
FWIW, when it was rumored that Key was coming to GT, I surfed some Bama boards to see their reaction since Key was a top assistant and recruiter for Saban. The 'Bama consensus was Saban wasn't unhappy to see Key go, nor would he try to keep Key. You have to remember that it was a period where Bama was going through a LOT of turnover (most due to coaches moving on for promotions), and Key happened to be a part of it. Key's salary was around $500K at 'Bama...his salary now is $600K. It wasn't a money issue for 'Bama if they wanted to keep Key.
Also keep in mind, Saban moved his staff around when Key was available so he could bring Key on to his staff.
IMO, I think Saban valued Key, but I also think Saban knows the foundation of his program is bigger than any assistant. That's why he's able to hire former pro and college head coaches, and top tier assistants, and he's fine when they leave. Key was a valuable part of the 'Bama machine, but he was never going to be promoted, so he came back to his alma mater for bigger role on the team and more money. Saban knows he would have some of the best coaches wanting to fill Key's role and let Key move on to GT.