It might not be a case of 'insufficient evidence', it might be a case of a legal argument took place.
Insufficient evidence is what the jury has to decide on - whether there is enough evidence to prove the accused as guilty or innocent. Its not something which a judge can decide on in a jury trial.
If the guy has admitted to doing it - then that's all the evidence you need.
The case seems to have come down to whether its criminal damage or not - technically in law. And this technicality is what was argued at court (possibly before the trial actually got started) with legal arguments between the defence, prosecution and the judge.
I think it is criminal damage - as did the police & CPS. Its caused damage which incurred a cost to rectify
Can you imagine if I came to your house and painted the front of your house & windows, and your car with emulsion paint - would you be happy if the courts said that I have done nothing wrong?