Eg you learn to run a team of hamburger flippers at the McDonald's University. Many SaaS startups have a tutorials page named $BRAND University. In that context, a bunch of atheistic reli-nuts calling their clubhouse a university isn't that far off.
I may be swayed that this is more of a "summer workshop" and not as academically rigorous as I'd like, but otherwise I'm not sure why you claim it doesn't deserve the title "University."
The ISU is an accredited University which offers formal Masters degree programs, while Singularity University is not accredited and does not offer formal graduate or undergraduate degree courses.
Just because they can use that title doesn't mean they necessarily should, especially an organization rooted in academia that wants to be taken seriously. Even if it is legitimate and well intentioned, spuriously using the term 'university' and having a disclaimer like 'Singularity University is not a degree granting institution' in fine print definitely doesn't send the right message. I don't think it's an issue of whether they deserve to use that term but it gives the illusion that they're in company with other dubious non-accredited 'universities'. It's just bad optics.