Iron(II) oxide on stainless steel?
It was probably a poor grade of stainless steel. The chromium oxidizes before the iron therefore you obtain a thin layer of protection. In poor grades of stainless steel, I have seen rust form over a period of time or during exposure to non ideal conditions such as high humidity. This is probably because the manufacturer added the minimum chromium required to meet standards, and so you get a smaller ensemble of chromium oxide and more iron oxide. 

You can treat the metal with phosphoric acid to remove the rust. You can also treat the stainless steel with concentrated sulfuric acid to produce a phosphate layer for additional protection with minimal loss of material (they do this in industry)