I'm going to have to agree with the Rockets GM. You are taking every other player with their contract having no bearing on picking them, why would Childress contract be different?
One, because that's the way the vast majority of us understood the rules. Two, because
Childress isn't eligible to play in the NBA next season, unlike every other player in this draft. We're drafting NBA players.
Again, is it okay if I draft Theodore Papaloukas and make him my starting PG? No, because he's signed in Europe, is ineligible for the NBA, and has no desire to play over here.
I have no problem with letting the Rockets have a "do over" if they were confused about the rules. However, from my standpoint -- and most of the board -- he's not eligible.