Man. That's just messed up.
I would agree with you. The pick moved was to allow the player not to go back to the original team. Of course he had a chance to re-draft him, since you were not going to protect him, but anyone could have drafted him before him. So I don't undertsand why the trade of Eriksson for a 5th rounder should be vetoed. - Because him might not draft him? He already had that.
The league that I'm in doesn't allow rental players. The commish installed a rule of couple of years ago to not allow a player to be traded back to your team unless it's been over 12 months since you had him last. Of course, you could draft him, pick him up off of waivers or sign him as a free agent.