I see your highlight in the your rule thing Spank, but I think that would just complicate things. Guys who are drafted in not the first few rounds often don't sign a contract for a while, and we want them draft eligible.
That being said, I agree with you that this dude shouldn't be in the prospect draft. I say this as a guy with no stake in this as I wasn't getting him in the prospect or waiver draft in any circumstance.