Skipped Batter Forgotten

[Manny A]

As relayed to me at a BBQ yesterday: Slow pitch game (but applies in fast pitch as well). Team's batting order had all 11 players present with an EH. One player pulled a hammy while running bases and had to be removed from the game.

Next time around the order and with two outs, that player's spot was passed. A couple of batters reached base, and then it was brought to the PU's attention that the skipped batter's order spot should have been ruled an out to end the inning, but nobody caught it. A discussion ensued on what should be done. The PU ruled that since the defense didn't catch it in time, just play on.

Seems to me that this is not something that requires an appeal. By rule, the skipped batter's position is an automatic out, correct? And the two players who subsequently batted should be nullified, right? But what if this had not been discovered until much more play had taken place? Say the team batted, scored a couple runs, then the opposing team batted, and then the light bulb came on? Is there a point of no return?