I don't really see a problem with this decision, though I am sympathetic to Wehrung. As the editors note, there are a ton of great papers JAMS doesn't publish (due to severe page count constraints at the journal). Their reasoning is not "arbitrary"; it was spelled out quite clearly for the authors in the rejection notice they got. Many other papers in "trendy" subjects face the same fate.
What do you think they say? "You're not well-connected, so we're rejecting you"? How do you think political decisions get defended in academia? For insiders, you listen to the referees. For outsiders, you invoke some vague criterion of lack of fit or lack of interest. And people can come along and say "If this field is important, why doesn't it appear in JAMS"? It's a self-fulfilling prophecy.
You seem determined to believe that the rejection was for "political" reasons despite having no evidence for this claim. The quoted reasoning was not "lack of fit" or "lack of interest," it was lack of "interaction with other areas of mathematics." Going back to my first comment, there's a general sense in the community that this sort of interaction among mathematical subfields (or with physics) is prized in research, and it's one of a few criteria that form the sociologically dominant view of what constitutes "good mathematics." You might disagree with these criteria, but it's not hard to see why that paper might lose out to other excellent papers when judged by them. This doesn't look like politics (favoring "insiders") to me; it looks like the consistent application of a value judgment about what good research is.
Again, whether you think the criteria should be the way they are is a separate conversation.
