He re-established control of the ball, in the air, which, according to the referee is not enough to "establish possession". He then needs to come down in bounds with the ball in his hands for it to be "possession". It's as if he has to catch it again. Touching the pylon isn't enough. He didn't (I think that part is pretty obvious in the video). As I said originally, I would have fudged it and given him the ball at the 6 inch line or something.
Now, as with other bizarro rulings over the years, like the tuck rule, I think you can argue
whether this is the way the rule should read. But it seems like they did call it correctly based on the actual rules. This
article explains why.