I think it was probably an unfortunate choice of words on Merric's part and a (purposeful?) misunderstanding on the part of those condemning him. I read "my poor, dumb players" the way I'd cringe and say (and have heard other people say) "that poor, dumb bastard" if I saw a player get blindsided on the field in a football game. Do I mean that he's poor, dumb, or a bastard? Nope, I'm using verbal hyperbole to commiserate with the feeling of "oooo, that's gotta hurt!"
Assuming we give the sorceror the benefit of the doubt and accept her word that she didn't think the spell would kill the BBEG, I think only she would have a chance to have the dumb label attached to her, and probably only her actions at that (I believe he's already said that the entire party knew that the killer had to be wearing the crown). Perhaps we should instead call her actions overexuberant instead of dumb?
I think it's just his choice of the "dumb" word that has got the hackles of the Player's Rights Faction(TM) up

Just because an adventure takes a turn that screws the players doesn't mean that the DM is a killer DM out to screw the players.
This was a "destroy the artifact, kill the BBEG, end of the world" type scenario; they tend not to have a multitude of choices ("The Ring cannot be destroyed, Gimli Son of Gloin, by any craft we here possess"). This adventure in fact seems to offer more option than many; there is no Golden Child or Chosen One PC or NPC, no PC has to choose to sacrifice him or herself for the Greater Good, and it's not set up so that only one type of character can achieve a victory. As railroads go, this one is kinda weak. All that is required is the Crown. Anyone coulda wore it. Apparently, the sorceror shoulda wore it
Of course there should be Consequences(TM), this is an epic adventure here! (meaning the tone, not necessary the level of characters) In terms of Consequences(TM), Merric's gone very lightly on them. I don't mean this in a DM vs the Players sense, where the poor little ingrates should be thankful that the Godlike DM doesn't visit His wrath upon them for messing with his pet NPC. I mean in terms of what the BBEG could have realistically done; I think Merric has shown how much he cares for the fun of his group in coming up with an "out" for them that will lead to more adventure and fun that the (much more realistic IMO) TPK would have done.
That's why I can't see the suggestion of the ultra-BBEG dismissing the party as unworthy of his notice as working. He's been released as a direct result of the party's actions, he therefore knows that they are capable of Great Deeds(TM). Had the Nazgul captured Frodo, I truly can't see Sauron taking the Ring and then saying "Pshaw! You see, you are no match for me, little hobbit, and are beneath my notice. Now you just scurry on along home before I spank your bottom." Azothoth? Sure! I bet he isn't in the slightest bit aware of those pitiful ants called humans he destroys in his wake. But Sauron would Get Medieval(TM) on your ass
