1. This investigation couldn't have been the result of other, illegally obtained evidence. It started from the publicly known Silk Road site, and didn't rely on previously known information about DPRs identity, nor on any "lucky coincidences" that could be set up using other information.
2. The vulnerability was easy to encounter even by accident. Unless it took a very large number of login attempts to activate the CAPTCHA, any serious investigation would hit upon this.
The only way I can see the evidence being bad is if they made it up completely. That is unlikely since Silk Road has had similar exposures in the past (http://www.reddit.com/r/SilkRoad/comments/1dmznd/should_we_b..., http://www.reddit.com/r/SilkRoad/comments/1b1lvy/warning_the...)
If they really had his info from an illegal search, they could make a better story without forging evidence by using parallel construction, e.g. claim that they investigated him based on his Stack Overflow posts.
Perhaps there need to be. Perhaps consequences much more severe than letting a criminal walk free.
It protects the population at large from an unrestrained law enforcement system from intruding upon you in a multitude of ways.