While I'm not defending the investigators, a lot has changed in 40 years and even though this might be unacceptable today it was probably different then (as stated in the article). It's very sad to listen to these people talk about how they were treated though.
When I was in Iceland I was told that tarred/paved roads are a relatively recent thing, given the volcanic landscape and the large number of fissures and caves, it's easy to see how you could wonder away from the "road", stumble, fall or just try to find shelter somewhere and succumb to the cold.
But yes, in the area the article is talking about, the ground is a patchwork of these fissures, which could easily conceal a body. On the other hand, there would be almost no way to wander all that far from the road without knowing it.
It's not impossible that he would have died of exposure and never been found, but I don't think it's all that likely.
It seems pretty silly to assume a murder with no body or evidence, when another explanation is possible.