A little detail on legality:

Mr. Yoshida had the authority as the plant manager to make the decision, said Junichi Matsumoto, a senior official at Tepco. And indeed, guidelines from the International Atomic Energy Agency specify that technical decisions should be left to plant managers because a timely response is critical, said Sung Key-yong, a nuclear accident expert who participated in the agency's recent fact-finding mission to Japan.

Considering the above, IMHO the real scandal is not the managers' idiocy in ordering a stop of seawater injection on the basis of a guess that the PM's "mood" is against it, but this:

Last week, Tepco gave Mr. Yoshida its lightest punishment of a verbal reprimand for defying the order.

A reprimand after his decision was clearly proven to have been correct?

The main thrust of the NYC article is something different, BTW: that Kan's justified distrust of the nuclear establishment prevented him from efficient disaster management, relying on advisors who didn't have the necessary information. For example:

This includes the existence of a nationwide system of radiation detectors known as the System for Prediction of Environmental Emergency Dose Information, or Speedi. Mr. Terada and other advisers said they did not learn of the system's existence until March 16, five days into the crisis.

If they had known earlier, they would have seen Speedi's early projections that radiation from the Fukushima plant would be blown northwest, said one critic, Hiroshi Kawauchi, a lawmaker in Mr. Kan's own party. Mr. Kawauchi said that many of the residents around the plant who evacuated went north, on the assumption that winds blew south during winter in that area. That took them directly into the radioactive plume, he said -- exposing them to the very radiation that they were fleeing.