I have given a ton of thought to this and I am becoming more and more split on what I think.
Was it against any written rule/law of the game? That doesn't seem to be the case. So the Carlsbad/Ambassadors FC defenders can always fall back on this and as much as many of us don't like it, they are correct.
However, what really bothers me is the fact that I have not seen 1 person involved in the match that has come out and said - "Wow, we really didn't think it was a big deal, but in hindsight the match should not have been played in the manner it was. If we had to do it all over again, we would not do the same thing. I would like to apologize to our players, parents, club, other clubs involved in the competition for our actions. While we still contend that no rules were broken, the manner in which the match was played goes against everything we try and teach our youth players."
I could live with this - but no one has even come close to saying this. Instead both sides are coming out with basically, "Nothing to see here...this happens all the time...USYSA was fine with it."
I think the real story lies somewhere in the middle.