Question on dropped thrid strike

[rinbee]

This has been bugging me since las season and I'd like your thoughts. In a senior BB game, less tha 2 out, runner on first. Catcher drops the thrid strike and BR runs to first. He cannot advance in this situation, but he runs, the pitcher overthrows the firstbaseman and the runner on first advances to third. I call the batter out and allow the runner to stay at third because the ball was not dead and he advanced because of the stupidity of the defensive team. Between you and me, was I right?