Sorry, I don't buy that argument. You could just ignore such people instead of take advantage of their foolishness for monetary gain. Nothing says you have to engage with each and every person showing up with preposterous claims on the internet. If he was the actual FAQ maintainer, using his position to advertise an impossible prop bet that really would only sucker in "cranks" isn't moral behavior. Failing to pay out by weaseling your way out of it with pedantic arguments about intent is even less so.

As far as I'm aware of the James Randi challenge doesn't require a participant to pay anything- it's genuinely a challenge and not a bet. It's not taking advantage of idiots to part them from their money and gloat about it over them after.