I'll give you that he should have stopped and squared up to the play, but what else are you seeing? Or not seeing.
You're absolutely right, stopping and squaring up would have put him into the position he needed to be in to properly see all the elements of that play. Additionally, with there being a collision, if either coach came out to discuss the call; his having been in proper position would put him on more solid footing to explain his ruling.
Watching it I just thought that he dug himself into a hole by his lack of movement off the foul line. He's still pretty much standing on the line and about one step into that casual stroll of his as the ball and runner are all arriving at first base. His lack of hustle took away any chance of him being able to properly stop and square up to the play with any kind of proper angle.
Maybe as the play started he thought it was just going to be a routine out and then it exploded into what we saw on the video.
What can I say.....to me it just looked like lazy umpiring.
I am assuming that because the ball went off the 1B's glove that he felt a safe call was not necessary.