I have no problem with this. The booking was done in a logical, concise way. Sheamus had an easy passs to the finals, where Morrison lost because he went through 3 tough matches and had a bad arm. Could Morrison have used the win more? Logic would say yes, because Sheamus is a two time WWE Champion, but I'd argue otherwise.
Sheamus had no direction whatsoever heading into this tournament. He was feuding with Santino, of all people. He had gone from defeating John Cena at 2 straight PPV's to losing to Santino, and Morrison once. He desperately needed the win to establish credibility. With HHH's return looming, Sheamus couldn't go into a feud he most likely will lose without much needed momentum. Enter being the 18th King of The Ring.
Morrison looked like a star in defeat. He battled through injuries, and tough matches with both Cody and Del Rio. Having already defeated Sheamus, I'd argue he didn't need the win as much. He was elevated by the loss tonight. This was good for both men, and well booked. Sheamus gets the win he needs to secure momentum heading into an inevitable feud with HHH, and Morrison gets momentum from taking the tougher road to the finals and taking Sheamus to the limit despite a bad arm. A good night for both men.