No, he didn't do anything wrong.
Ofcourse he did something wrong.
Blizzard rolled his level back because he took a game mechanic and massivly abused in his favor. Not even FS is stupid is not to think that grinding 1 kind of mobs through 5 levels i okay.
Just because he did not abuse the game through glitches, hacks or whatever does not make his way of play okay. Sure, you can think otherwise. But the big boys @ Blizzard, surely states that he did. And i totally agree.
No matter however you want to discuss this - you cannot win the argument. :)
FS did not cheat. There is nothing wrong with farming one kind of mob. You can kill one of them, you may kill two; or you may kill hundred. It is not cheating.
The only argument that you have that is right, is that Blizzard can do what they want. That does not mean FS cheated. It simply means that Blizzard does not want FS to be the world first. Nothing else.
If you knew just a tiny bit of Blizzard's history, you would know this happens every expansion. But clearly you don't, so go on making yourself look like an ignorant fool.