The Judge based her decision on the testimony of Stan Lee first and foremost. She said so herself.
"Marvel's side of the story is told by the most percipient of witnesses Stan Lee...Marvel's motion stands or falls on his testimony."
The key here is Lee's contention that he alone created every plot and character before ever speaking to Kirby.
The idea that Kirby only paced Lee's stories is fully in line with how Lee describes the process.
Toberoff never tried to argue Kirby was due some co-creator status based on the theory Kirby only paced, and set decorated Lee's stories. If Kirby's contribution was all based on Lee's seminal ideas then very obviously Kirby's work was "work for hire" because he did nothing until after the core concepts were created by Lee, and it was the creation of the basic ideas which was the basis of the case. The key point is was it Kirby pitching ideas to Lee, a riff on the Challengers, a revamped Fly, or was Lee coming up with those basic ideas and feeding them to Kirby. Lee was the only witness, and claimed he created every idea and plot by himself, the judge saw nothing which could contradict his testimony, case closed.
The idea an artist deserves co-creator status for what he brings to the table in the form of the pictures he draws, and a feeling the current copyright law is unfair are deserving of attention, but have little to do with the Lee/Kirby situation where Kirby adamantly maintained he brought core ideas to Lee, and they were then purchased.