KO Mechanic, Ball Placement

[kfo9494]

I had a little situation this year come up concerning this situation. The kicking team was one that lined up with the ball on the ground and waited on the ready for play before the kicker approached the ball (like a on-side kick siutation) then stopped and placed ball on the tee.
As the kicker was backing up the ball fell off the tee.
Now this was a night with no wind causing any problems.
The 25 sec clock ran out, before he could reset and kick the ball, and a delay-of-game was called on the kicking team.
The coach made a show of the penalty to the point of calling time out and wanting to talk with me. Said that if the kicker, even with no wind, was approaching the ball and the ball, fell off the tee, then we should stop play. He said he has seen it a hundred times.
What is the difference?
>
He still got his 5 yard penalty.
Should we have stopped play and reset the 25 sec clock?