The argument against the rule isn't whether he caught the ball or not. He did. Every part of his body that would declare him "down" was down before the ball hit the ground. But, the rule says that he has to "maintain control without the ball touching the ground".. where that time frame ends, nobody really knows.
The biggest complaint I have, though, is that if he touched the ground with his feet, then fell out of bounds and dropped the ball in a similar fashion, absolutely no question it would be a catch. It's just a dumb rule that seems to have very little foresight. If he has the ball in two hands or "under control" (which he clearly did) when he hits the ground and is declared down or out of bounds, it should be a catch.