I agree, in part. The problem with law is that it's very black and white. It's very binary. Any challenge of 'I didn't like it' or any variation on that theme can be fairly easily dismissed - one which is based around fairly clear black and white rules of entry not being followed - that's not quite as easy to wish away. Someone in the Medium legal team is going to have to be shouting at the editorial staff for this one.
I don't think for a second they're going to take the prize away from the writer - it was an objectively well written piece - but it's the validity of the award that's under question, not the quality of the piece.
That's why when David Beckham was caught doing 60mph in a 40mph zone, he didn't contest the charge - his lawyer argued the notice arrived one day after the 14-day window closed and the CPS couldn't prove they'd put his notice in the post within the timeframe. The judge had no other option but to throw the case out. Rules is rules.