That sort of depends on your definition of "legitimate", but in my opinion, no.
I am fully aware that I make below market pay. Almost everyone (except for my developer co-ops, who I need to pay above market to be competitive in the local market) at the not-for-profit I work for does. It's not something that it hidden but our revenue comes from government money and membership fees that is best applied towards fulfilling our mandate so from a community perspective standpoint there is some degree of necessity.
There are other compensation factors though. There's some amount of profile enhancement (in a smallish pond), I've learned a ton, I get to work with a huge number of startups, I get to participate in any of the company-run events I want (and there's a lot).
To me, those are legitimate reasons for me to accept a salary under market value. But if we were a for profit the equation changes dramatically.
Salary is not the be all and end all for all (arguably most) people, and if it's within a certain percentage of market value, then other factors of compensation do make it worthwhile. Maybe you could get 10% more working in grey cubes but you wouldn't be working with those people, you wouldn't be part of a significant force in the geek culture world, and for some those trade offs are worth it.
What makes it stink for me is that I feel like PA could afford market rates, and they're not entirely because they know they don't need to be competitive in that regard, and to me that feels exploitative. They have a huge crowd of people willing to sacrifice some financial gain to be part of them, and they're going to take advantage of that.
It's reasonable from a business standpoint, I think it's even ethical, but it doesn't mean that it's a good thing.
It's just another example of people abusing their power. Got name brand recognition? Use it to stick it to your workers. Prettying it up with bright primary colors and photoshop fades all you want, we can still see the reality behind the flowery show.
I would like to believe that this guy enjoyed his job and it was a fair relationship. But that just doesn't ring as true. He's deluded himself into believing that he's working for a greater cause, the people who like Penny Arcade. It's not really a noble cause though is it?
So what I'm missing is whether there's a legitimate reason for him to be paid below market considering the Penny Arcade seems quite successful.
Though as one of the many people who's accepted supposedly below market pay, I can somewhat relate.