The biggest problem IMO was that the store said the TO wasn't eligable, but claimed a prize anyway.
Giving the TO the first round bye isn't inherently wrong. For all we know the bye was decided randomly and it just so happened the TO got it. But I'd say if I was a TO and a first round bye made things run smoothly, there's a certain amount of logic involved in having the TO get it.
If the point is to play X-Wing how many people really want a bye rather than play a game?
Also there isn't even a hint of impropriety on the TO's part mentioned here. If he's that good of a player then a first round bye likely meant nothing. MoV is only useful for tie breakers and the TO was undefeated.
The reason a TO shouldn't be eligable for prizes is because that can possibly taint the event, but in this case no one seemed to feel he won 2nd because he was the TO. Although again there is the issue that the store said the TO shouldn't get anything.
But normally I don't think the TO needs to exclude themselves from prizes unless someone has an issue with it.