Birdstone is, like Smarty, a home-bred meaning the owner also owned the mare and selected the stallion.
Mary Lou Whitney went through quite a bit of trouble to get the mare back after her husband's will ordered all of the horses to be sold after his death. (There is quite a story behind that too!)
Birdstone was such a runty colt that not many people believed in him except Ms. Whitney, the trainer Nick Zito, and the assistant trainer.
Mary Lou Whitney does not need any more money, but I think she felt her little colt was vindicated in the race. I think she felt bad that the vindication had to come at the expense of Smarty's crown.
Regulations are a poor substitute for ethics.