This is a guy who, by his own admission, wants it to go to Microsoft, but is also holding an auction. He could just quote Microsoft $2M and be done with this whole thing.
Instead, he and this "security firm" publish a big article on one of the internet's most lauded security blogs where they outline how blown away they were with how much data was being sent to this domain. They left it open for 15 minutes and got millions of emails, passwords, etc. "Wow, bad people reading this, look at how much data you could get. You better join in on the auction. Microsoft, you seeing this? You better get in on this too. Bid often and bid well, friends."
I wonder what kind of authority ICANN has in revoking domain name registrations in extreme circumstances. Microsoft fucked up here, but we're long past that being a relevant component in this discussion. This registration should be pulled out from under O’Connor and blocked from registration for 100 years.