Freeroll--too passive?

[Quicksilvre]

The situation: the final three in a freeroll NLHE tournament at a frat house bar. Hero has about 600, both villains have about 800. Villain 2, to Hero's right, seems to be just barely the chip leader. First place is $50, second is $20.

Blinds are 40/80. The atmosphere is loud and partying, with a "we're just here to gamble and have fun" spirit.

Villain 2, on the button, calls. Hero folds. Villain 1 raises, Villain 2 goes all in, and Villain 1 calls. Villain 1 takes down the pot.

As he counts down his chips, Villain 2 seems to go through them halfway, then tells Villain 1, "You got me covered." He pushes all of the chips to Villain 1 and heads off.

I never got a great look at how many chips he had; I assumed that he was telling the truth, since it seemed close. Later, Villain 1 said that he throught that Villain 2 still had chips, but gave it up because he wouldn't have enough for the big blind.

I let it go because:

1. Letting it go would put me in the money for sure, and
2. Making him count it down seemed too nitty for the circumstances

Should I have made Villain 2 count it down?