Truthfully, you should have stepped in as a witness once the other officers arrived. A verbal argument should never lead to an arrest if no threats were made. Think of if this way... if you and I had a verbal argument out in public, neither you or I can arrest each other and send the other to jail because we felt disrespected. Why should an officer have that special ability? Now, some idiot may say "no, it's none of your business", but that does NOT apply to situations like these. You were in fact a witness, and it was your duty to say something. You can never be in the wrong for using your freedom of speech. When one persons' freedoms get infringed upon, everyone's' freedoms get infringed upon, because that could easily be you next time -- and every time an infaction like this occurs, it becomes more and more likely to happen again. The saying goes... "those who can do something, should do something".
It's all forgiven now, but just remember for next time.