While I think the right thing of Twitter would be to give the account back, they didn't really do anything wrong (if the story is to be believed). Hiroshima simply changed the account name, and let the hacker know it was available.

Not sure Twitter could have done anything to prevent this from happening.

I am too. Just because Twitter can very easily prove that account was stolen and return it to the owner. I don't think it is possible to steal, for example, twitter name "jack" or "barackobama".