How does all of this fit in with the social contract? The player's actions suggest to me that they didn't care much at all about fair play.
Personally, I'm not really too sure. Since the player did not intentionally trigger the bug in order to gain from the result, did he really exploit the bug? Or was he simply an innocent beneficiary of it?
Refer back, for example, to the various lords that found themselves the beneficiary of (on average) 4,000 extra gold in their weekly tax income. What should they have done with the gold? There is simply no way to just lose it. But if they spend it... is that exploiting a bug for personal gain?
Realistically, what did you want the guy to do? Step down and take a pretty hefty honor/prestige penalty for stepping down so soon after being elected? Really, that would probably have cost the guy 4 or more prestige, and at least a dozen honor.
Taking the region back may not have been the right thing to do, but I don't really see it as being abusive.