I'm assuming the "fees" were for background checks of various types, to which the landlord actually paid third parties, out of pocket. IMO, those fees are never refundable. I would not call it an Application "Deposit," rather just an "Application." If the landlord finds anything unsatisfactory about you during this process, the apartment will not be rented to you. Period.
You verified that you wanted the apartment and paid a Security Deposit so that the landlord would not rent it to someone else, n'est-ce pas? Did you have a written agreement outlining what the Deposit was for? Did it mention forfeiture if you changed your mind (as you admit you did)? Yes, a Security Deposit is quite normal. Sometimes it can easily amount to twice the monthly rent, typically to cover the last month's rent and a damage deposit -- especially in a market where apartments are scarce...and expensive.
Ask yourself how much the landlord may have lost, having an unrented apartment for even one month. Actually, it doesn't matter. He has your money; you're holding nothing but perhaps a cancelled check... and hot air. In real estate negotiations, NEVER ASSUME ANYTHING. Get everything in writing.