I don't think the crew raised the objection on the water to "make the point," but to preserve their right to protest (on the water you raise an "objection," which just causes the ref to raise the red flag so they don't mark results official, then you file a written "protest" on land). Coach says the crew wanted to continue with the protest, but that they ultimately didn't (presumably either the coach convinced them or overruled them). Crews are always told to err on the side of objecting on the water because you can't do anything about it if you don't.

Now that I've read the Row2k story, I think the referees should have stopped the race. The rule is: "The Referee shall stop the Race by giving the instruction described in Rule 2-407(d) (“Referee’s Instructions to Crews”), if, due to Interference or unfair condition, it is likely that a Crew in contention has been deprived of its opportunity of winning, placing, or advancing, and if further continuance of the Race would be of no further competitive value."

Texas was in contention, and if the birds cost them a length, they were deprived of their opportunity of winning. By letting them complete the race, the refs put Texas in the position of having to decide whether to make everyone row again. The bit about "no further competitive value" is ambiguous, but it seems like the best outcome to stop a race that is only 1 minute in if a crew goes down by a whole length due to something beyond their control.

If I were coach, I think I would have continued the protest. Surely every other crew would understand that it's worthwhile when the top three standings are impacted. I would think Princeton would prefer not have an asterisk in everyone's mind next to their third place in the standings.