But they COULD have STOPPED after they realised it was a bug. Based off what their admittance letters stated, they NOTICED this bug over a period of pulls. So this wasn't a case of it happening once by accident and them killing it on that attempt. If that had been the case I'd be right up there with you defending them. But this was a case of them IDENTIFYING the bug and then using it to their benefit.
This makes it an exploit which they then EXPLOITED to get a kill. As for Blizzard knowing about the bug...is there any proof outside of word of mouth that Blizz knew about it beforehand. It's a pretty obscure bug to have a tank die DURING a cast (unless it's a channeled ability) rather than after/at the cast, and doesn't sound like one you'd typically encounter.