What is stupid is putting a non-threatening, legally-boarded passenger in the hospital. Look at how quickly United settled this lawsuit. They knew they were at fault—and have publicly said so multiple times.
There was no belief that when this began that anyone was going to the Hospital. One cannot plan for events that seem quite unlikely before they happen.
So far as legality is concerned, the contract when you buy the ticket says they can legally remove you. Their settlement has more to do with bad publicity than it does with what is the law.
United just wants the bad publicity to go away, and at this point they don't consider their legal rights to be the more important issue at stake.