I knew about water intoxication only because of an episode of ER a few years back. The radio station is very much at fault here - it's gross negligence on their part. A large lawsuit would likely sink most radio stations, depending on whether or not they have a large corporate owner. I can see multiple lawsuits here, the first from the family of the deceased. Other participants would also do well to sue because their well-being was also put at risk through this misrepresented promotion.
If the promotion had been wrestling a wild bear, then I'm sure participants would be rightfully wary. But in this case, as Tony pointed out, who knew drinking a lot of water could easily lead to death?
Stupid radio personalities (and 99% of the people on the radio are barely smart enough to tie their own shoes) are the primary driving force behind my decision not to listen to radio. Next comes of course crappy music selection and non-stop commercials.