PHPFog fucked up security, that's a given. And they should be thinking carefully on the lessons learned from that.
But your post seems to imply that the kids who did this have no responsibility for their actions; "it was just waiting to happen". This I strongly disagree with (not least because I work with 16 year old kids and they are completely able to take some level of responsibility for their actions).
Sure, at 16 your world view is incomplete and you can make rash decisions ("for the lulz") that backfire bigger and faster than you imagine. On the other hand there is no doubt they knew the illegality and the ethical issues with undertaking this - even if only vaguely.
And if they do not completely understand those issues, do you not think they should be taught them? As responsible adults we should be getting across to them in a sensible fashion that this was not a nice thing to do, and that the impact could have been a lot wider than it was.
Because if we don't and next time they do some real damage, well, that was an opportunity lost.
FWIW I think he crossed the line by causing damage. If I caught a kid breaking into my house I would probably drag him home to face his parents. But if he started smashing plates I'd be a little more pissed, that is a wanton act and probably needs a more severe punishment.
Sure, criminal charges are a silly approach in this case (no need to ruin his life for one silly mistake). Call his parents, explain what has happened and then get him to do some sort of "community service". That's an important lesson in consequence.
In this modern world 16 year olds are not nicking alcohol from the corner shop any more; they are breaking into websites. And that has potential for much more dramatic and widespread impact. We need to stop saying "oh, they're only kids". Instead we should recognise that 16 year old "hackers" exist on the internet and think of ways to communicate with them (ideally in a way that gives them an avenue for their curiosity without risking too much damage :)).
Bottom line; a 16 year old kid is a far cry from your dog when it comes to the ability to "understand" what you have done.
Just my 2p :)