As you point out, the legal question is different from the policy one. The legal result seems fine, though the policy one is more iffy. There's an intrinsic revulsion toward the idea of dumping anything in a lake, but it isn't clear (to me at least) that such a policy would be that much worse than the alternative:
ABA Division for Public EducationThis plan would require filling about 100 acres of wetlands, and the tailings pile would eventually be about 150 to 200 feet high and about 1200 to 2000 feet wide on each side.
Interesting case either way.