Did not look illegal to me. I teach my wrestlers to get to the mat before their opponent when taking them down like this - and he did. It certainly didn't look like "he slammed him on his head" like the announcer was saying.
However, I do agree with the coaches/trainers who said that he could not continue after being knocked out. A championship is important - but the potential for brain damage after a concussion is even more important. I wouldn't risk the kid's future health. (Of course the kid says he can continue wrestling! They'll tell you that while undergoing multiple amputations!)