Think of it this way - let's say you are playing against an aether player. You design a deck to fight aether... and then that player fights you with a 100% fire deck, and wins 2-0.
He obviously won only because he used an illegal deck. Now, do you think it would be fair to simply give him a penalty? Nope, he used an illegal deck, so it is considered a loss.
The only difference is that in our case it was by mistake and the difference was small, but still, the deck was illegal. We could have hoped for an exception, but it was certainly within the rules to count it as a loss.
As for the series of losses... damn luck, we were also out of luck in the beginning of war 1. Then we had a winning streak... when we were left with <60 cards... :|
It was quite epic, but I prefer winning with more team members... although 9 is a bit too much, it's hard to organize, 4-5 was better in my opinion.