Wow. I wasn't even aware of this contest (I just read the forums), but this is hilarious.
I read and enjoy Kotaku, and will probably continue to do so, but jeez, it's just a game blog with bad writing, typos and misspellings all over the place, content reposted from other blogs or scanned from Famitsu, and outrageous rumors. There's very little "journalism" going on and it's just ridiculously self-serious to pretend otherwise. The idea that one more fake rumor out of the hundreds they've posted could "hurt their credibility" and the credibility of a forum/blog that doesn't even claim to be a news site, at all... it's just crazy.
Kotaku may have a lot less comment trolls than other news blogs like Joystiq (I'll say that for Kotaku, they're pretty dang good at policing their comments and attracting semi-intelligent commenters), but it's just laughable how seriously they take themselves sometimes.