so did they get gypped
Yes, I think so. It isn't just the number that they got gypped on, but the recognition. They got gypped out of the recognition for contributing great content (or whatever the contribution for that badge is). If I look at their "nice answer" badge page, there is no recognition for that post.
The current process is a little funky anyway. "True user" creates sockpuppets to upvote posts of the "true user". "True user" earns badge. All sockpuppets are merged in, and "true user" still holds badge. (Also a literal example.) It is almost like we're doing things halfway. Either revoke badges, or award people for new accomplishments as they earn them. Since badges earned improperly are the much rarer case and much, much hairier, I'm ok with that not being handled as part of the automatic process and only handling it manually when it is truly malicious.
TL;DR: Yes, award and recognize people for their accomplishments. It'll cut down on the meta support posts we get asking why a badge wasn't earned too. (: