Faith Baptist Bible isn't even a Division III team. Everything I've read, from people in the know (http://www.d3boards.com/index.php?topic=4558.12195 -- starting around page 814) indicates that Grinnell specifically intended to have Jack Taylor set this record. He literally wasn't playing defense -- he was standing around at halfcourt to receive an outlet pass so he could jack up yet another 3.
Somebody watching the video noticed that Faith was cheering this on, and the Grinnell crowd was cheering scoring by both teams (http://www.d3boards.com/index.php?topic=4558.msg1469592). I have a suspicion that they were in on this joke. Given that their opponent was not an NCAA team, I don't think this record should count.
It's interesting that for all this, they've never won an NCAA tourney game (Division III, that is). I don't think they've even won their conference (see http://d3hoops.com/teams/Grinnell/Men/2011-12/index and look at the other years -- usually their last game is against a conference team, and they've always lost). That kind of run and gun and press may be fun to play and watch, but it doesn't work against good teams.
And there's plenty of very good basketball being played in Division III. Yes, it's very rare for Division III teams to beat Division I, but a couple of weeks ago MIT lost to Harvard 69-54, and the game was not a blowout -- Harvard had to work hard for its W (Harvard shortly thereafter beat Manhattan College, which is also Division I, 79-45). If you watch the real power teams in Division III -- schools like MIT (yes, MIT is ranked #1 in Division III right now, and they have some damn good players, including a point guard, Mitchell Kates, who was abusing the Harvard back court all game), Amherst, Williams, Franklin and Marshall, Cabrini, UW-Whitewater (which beat MIT last year in the semifinal, and went on to win the title), it's very high quality basketball, just not the kind of athleticism you'll find in Division I. Teams like these, that play real defense and are in control on offense, would make short work of Grinnell.
And one of our (MIT) alumni, Jimmy Bartolotta '09, was Division III national Player of the Year, and is now playing professional basketball in Iceland.
(Yes, I'm an Ancient and Honorable Nerd of the Infinite Corridor -- VI-3 '87. I'm unofficially one of the team photographers. See http://rlk.smugmug.com/Sports/Basketball)