I'd agree that something was purchased for $20000, but what? My assumption is a license to redistribute the poem as part of the game. This guy is probably correct that he did not agree to an NDA, or transferal of exclusive rights.

That's why I think MS did not need to pay him off; they thought they had a license, even if they didn't own the IP. And that's also why it's totally legit for him to republish his own work under a free license.