This is not the right deterrent. He shouldn't have left his system open for a year longer. As I read the Randal Schwartz description of what happened it seems to me that he did exaclty what I'd have done. The fact that everything was done overtly, which is not denied by Intel, proves to me that he seriously didn't want to get into any other system unnoticed. As a sysop you are responsible for implementing at least some of them.
Mistakes are human.
Interpreting an English text differently from someone else wouldn't even classify as a mistake in my opinion. This is so very common. I think this is too harsh a conclusion. Off course, in the current situation I can understand that Randal is sufficiently pissed at Intel, to no longer want to work there. Similarly being Intel I wouldn't want to have someone who possibly might be pissed working on the inside.