Exactly.
If I contract someone to do some work for me, and not only do they not do it but they cost me money, there is no way I'm going to pay them. In fact I'd probably penalise them and try to recover costs, especially if others are affected.
This is not exactly what has happened here. *Contracts* were not broken.
A good outcome would be for Brucexie to apologize and *allow* the money to be distributed; then Eligius sets about creating a statistical measure of work quality going forward that everyone has the opportunity to accept or reject.
If someone pisses in my water bucket because he thought it was his piss bucket, then I guarantee you that I'm going to take some of his water, contract or no, whether he wants me to or not. I'm not going to allow my well-being (or my family's well-being) to be contingent on his moral fibre.