Running a Tor exit node in itself isn't a problem. The problem arises when the exit node operator knowingly is giving up control over the traffic going through his connection.
If you run a tor exit node you need to accept the fact there is a chance something illegal is passing through and that when it happens (as it did here) you are going to get investigated.
It would be irresponsible and neglectful for law enforcement not to raid this man's home.
I have no issue with the intent, and such things are - in a restricted manner - allowed for, see prostitution stings.
But the fact that they -do- distribute CP is verifiable fact.
I'm not even concerned that they hold it. Sometimes it's evidence. Sometimes it can be used to identify and rescue victims. Sometimes it just goes in a database and isn't ever accessed again. Meh.
The continued distribution is concerning, though I understand its purpose, and I presume there are reasonable safeguards in place such that the value in catching new suspects is higher than the harm done to the victims.
At that, one has to assume that they "planted" the image in question because they've proven their willingness to play dirty.