The Martian atmosphere is not flammable. Its made up of mostly carbon dioxide.

I think all the subterranean martians that produce those occasional bursts of methane that we detect on Mars probably just worked overtime and caused the atmosphere to get a high concentration of that gas, which is very flammable. There, now I've scienced it up!

Twenty fourth century terra forming technology probably enabled them to convert the carbon dioxide atmosphere into something breathable. Also remember its "Science Fiction" not "Science Fact".

Um, honey, if you look up the history of Mars in the "Star Trek" universe, you'll find the planet was colonized and terraformed centuries before the Picard story. If the atmosphere has oxygen in it, it is flammable, and that was the case here.

Mars played a huge role in the Federation for centuries because it was where the Utopia Planitia Shipyards were, the number one place to have a starship built, including all the various Enterprises.

The planet had been terraformed. I think something was released into the atmosphere that could ignite and cause some kind of massive firestorm - although what could possibly still be burning 13 years later I don't know. It couldn't be any material we're familiar with, or ordinary chemical combustion.