That engine should have never blown. He wasn't abusing it, it takes more RPMs and throttle than that to get my old 2000 Camry through the mountains.
However, I do somewhat stand with Toyota on denying the warranty claim. They need to have a public policy that they either cover their cars in the event of a failure from track use, or not. Too much gray area to sometimes cover it and sometimes not. And opening the door to cover everyone and their friend to take every single in-warranty Toyota to the race track, beat the crap out of it and rest assured it's covered under warranty, isn't realistic.
But, they should at least pull the oil pan and see if RTV starved it. If so, it should get a new engine IMO.