Here is a quote from the DMG, pg. 9:
"When everyone gathers around the table to play the game, you're in charge. That doesn't mean you can tell people what to do outside the boundaries of the game, but it does mean that you're the final arbiter of the rules within the game. Good players will always recognize that you have the ultimate authority over the game mechanics, even superseding something in a rulebook. Good DMs know not to change or overturn on existing rule without a good, logical justification so that the players don't grow dissatisfied."
The GM, reguardless of whether I agree with him or not, does have the option to create his own ruling on the situation when either a rule is presented, or not in the case of the falling weapon. It was his decision, and probably his rationale of the subject. We, or his players/friends, can not fault him for making a decision similar to something that we probably have made in the past.
Only one question remains, and that is:
Can we create a rule to determine whether or not a magical item is affected from falling damage?