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Just my opinion if you're going to offer a prize as an incentive for participation then why would you go ahead and screw people out of a win in the first place?
Obviously people participate for fun, but many wouldn't mind $20 as a prize if they went all the way, you guys ruined someones chance at that and if you think you didn't don't host another one of these again if you are going to participate yourselves in your own tournament.
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The issue isn't the prize. I know for a fact colin could care less about $20, it's the fact they screwed him over as a joke when he wasn't in on it to begin with.