So can they just re-register it when it expires, or is the reason they can't do that because lots of people will be waiting to register it at the moment it expires?
People are queueing up to take over any domain with moderate amount of traffic. Since the expiry time is public, there are lists of soon-expiring domains. This is way worse for a heavy traffic domain, and probably ridiculous for x.org.
You can't register a single-letter .org anymore.
So they are currently grandfathered in, and as soon as the record expires it's a dead domain?
yep
But they are being "awarded" [1]. So if it expires, maybe they could get it back since they're a non-profit.