I think it was wrongly decided. But, even if one accepts the majority, I agree with you that it did not find WKA to be a natural born citizen; even though his parents were permanent residents of the US.
What many are missing, is that “Natural Born” citizens do not have to be born here. They are “naturally” citizens by the particular circumstance of their birth, that being that both of their parents were citizens at the time of their birth.
This is why so many were totally wrong about McCain. McCain is a NB citizen because his parents were citizens. He could have been born in Moscow and still been a NB citizen.