I have a quick question about legality when it comes to stock photo sites. Help?

So for a contest, I used a picture I found on Flickr that was not protected by a copyright. A couple days later, I found the real owner and saw that he had the photo available on iStockPhoto.com. So I went and bought the rights to download this. The operators of the contest disqualified me for copyright infringement because I "didn't buy the rights". Is this right or was I screwed over? I don't know the legality behind this, so I have no idea. Thanks in advance.