I don't think the event organizers "caved". The hotel is still allowing vaping inside the ballroom where the event will be held, which is sufficient for the purpose of the event. Granted, it might still have been moved had there been time, but there wasn't, so... handling it graciously given the circumstances simply seems like taking the higher road, IMO.
FWIW, this whole brew-ha-ha has had the advantage of getting both the event and some accurate information some local air-time, which can't be a bad thing. Way to go, guys!