The director's defenders rightly pointed out the absurdity of Vimeo removing the short film just hours after giving it a "Staff Pick" award, but the real absurdity runs in the opposite direction -- how did Vimeo's staff give an award to the film that they should have known was a knockoff? Presumably they had heard of the Power Rangers and knew that the movie was using the characters without permission.
Because knockoff videos happen every day and usually the copyright holder doesn't care. See "Mario Warfare", or any other group of people having fun with cosplay. The same thing goes with fan art.