Pollsters do look at how a team does later in the season. That 20 point loss came very early in the season (early december). And then two weeks later they beat another 1 seed. Just the same, La Tech got revenge over Rice and and then demolished them in the championship game, proving that the loss to Rice was just one bad game. Even the the number one seeds have bad games. Is there an undefeated team in the country? La Tech only had 2 bad games, even though one was against a 1 seed. I don't recall anybody saying La Tech deserved a 1 seed now. And a 7th place ranking in the polls doesn't necessarily translate to a 1 seed. But, La Tech could very well deserve a 2 or 3 seed based on their record, win against a top seed, and they dominated their conference (except for one bad game).
La Tech should have been at a minimum a 4th seed.