Rule 26-1 Relief for Ball in Water Hazard now states, "It is a question of fact whether a ball that has not been found after having been struck toward a water hazard is in the hazard. In order to apply this Rule, it must be known or virtually certain that the ball is in the hazard. In the absence of such knowledge or certainty, the player must proceed under Rule 27-1 Lost Ball."
It was Robert Allenby who pulled his tee shot left toward a lateral water hazard where it struck a tall tree. From there, no one was able to see where the ball landed. Since there wasn't knowledge or virtual certainty that the ball was in the hazard, the Rules official did his job by enforcing the Rules and made Allenby return to the tee to play his third stroke.
For clarification of the phrase "knowledge or virtual certainty," please read Decision 26-1/1 at USGA.org. This explanation is also used when applying Rules 18-1, 24-3, and 25-1c.
Even though this ruling sounds harsh, the purpose is to protect the field by preventing a player from taking undeserved relief from water hazards or other conditions.