I think it was a case of protecting the product based on how many votes were cast. With Pickle gone Simon doesn't have much of a choice but protect the goods.
And, I do think that she was owed something of an apology. Tell her the performance wasn't great, her voice was off or the song didn't fit. Don't compare her to a crack addicted waste of talent and say that she ain't good enough. Plus, the guy who wrote the song helped her work on it. Think his opinion might count for something here?
I would think David Foster's opinion ("Katharine has a great future" if memory serves) should count for a lot.
I think all three judges have a hard time not playing the original artists' version in their head while evaluating the person in front of them. I think the look on Katharine's face said it all when Simon told her she wasn't Whitney Houston. She knows she's not, nor was she trying to be. Sometimes we need to remind the judges to limit their comments to something constructive for the contestant that can actually help them improve their future performances.