They may deserve some blame for not defending the term as well as they could have done but I don't think it's a badly defined term, I'll be up front in that it seems to me to be incredibly intuitive that open source should mean access to a programs source code in a manner that isn't burdened too heavily by copyright or intellectual property laws or otherwise coming with baggage like usage or redistribution restrictions. Releasing something as 'open' and then placing restrictions on its use seems like the counter-intuitive use of the term here, and for some perspective this is something the FSF and GPL gets criticised for by proponents of more permissive licences like BSD or MIT and is part of the reason why we have the split between free/libre software and open source software in the first place.

As far as the terminology goes, keep in mind that the people defending the OSI are generally the people or at least in line with the people that coined and popularised the terms and their continued usage, and while that may seem like an easy way to dismiss certain talking points it's a point that's going to keep being brought up in response to the argument of feigned ignorance to the terms, and I don't mean this to come across as too mean but something like open source has 20 years of mindshare, free software 30 years, more broad but still applicable terms like open access 40 years, or the greater cultural undercurrent much longer than that. At a certain point even the most well meaning individuals who are looking at existing open source licences and creating their own with the express intention of avoiding commercial exploitation[0], a problem almost exclusive to open source licenced software, are going to recognise that what they're doing isn't entirely in line with the existing open source ethos, and I don't think it's unfair or entirely unexpected that people will point out that it's not part of the open source ethos.

[0] From the licence: 'Under no circumstances shall the Person be permitted, allowed or authorized to commercially exploit the Software.', but other similar and more fleshed out licences might make the connection to open source software being exploited more explicit.