I agree that getting the title without a final fight would be unfair to the other trial members and I would feel very bad getting a free title.
On the other hand, it feels an unfair punishment not to get a chance to fight for the title, just because both the current master and the only other challenger decided to drop out. I have played and won 3 games against time challengers, prepared my decks for the in-element battle that did not occur due to regen2k9 dropping out.
IMHO, the best solution would be to allow some challenger(s) from other element trials to switch to light at the end of phase 2, i.e. those who feel do not have a strong chance in their selected element and would be interested to try for light. Such switch was supposed to happen at the end of phase 1 if more than 4 people applied for the same element. Therefore, this would be the smallest twist on existing rules.