No, it’s not correct. A Sunday Celebration in the Absence of a Priest does not meet the obligation. If Mass is truly unavailable (if it’s physically or morally impossible), then the obligation itself no longer exists. This is not a dispensation (I mention that because I’ve seen that word posted several times now), although the bishop (and to a limited extend, the pastor) can give such a dispensation from the Sunday obligation.
A Sunday Celebration in the Absence of a Priest is not something that laypersons can simply do on their own initiative, not even in an emergency situation. Only the local bishop can authorize such services, and even the bishop is bound by laws which govern when he can and cannot authorize them.
So, unless they had a mandate from the bishop, they should never have done it. Now, if they did have a mandate from the bishop, of course they could do it.
Unless they had that specific mandate from the bishop, the right thing to do would be to refer people to other Masses in the area; after first making a sincere effort to find another local priest, but since the expected priest was already a substitute, it doesn’t seem likely that they could have easily found one on such short notice.