That case was discussed a lot online; funny thing being that based on the information on hand, the TN guy really wasn't a citizen.
You're point still stands, though. In theory, had that gentleman gone ahead and filed an N600 prior, he would have discovered his status much sooner, and had more time to take corrective steps.
A passport is proof of citizenship, but notthing beats an Amercian CB/CON/COC/CRBA. If I had a kid that derived, a COC is DEFINITELY something I would invest in.