That's insane. I'm not a gamer but it looks like they just published how to "hack" the console and they were hit with that. That's crazy. In the span of a minute, I can think of a dozen better solutions to this.
If I'm reading properly, they didn't even do anything that I'd call wrong. They found an exploit and published it. I suppose the DMCA and "circumvention tools" come into play - but that only points to the absurdity of the situation (at least in my opinion).