The call appears to be correct. It is a squeeze play. Therefore, it is a batted ball and by virtue of the runner sliding into the ball deflecting it he is out by rule unless he touched home base first! Since the umpire called "interference" then rule 2:00(a)states: "Offensive interference is an act by the team at bat which interferes with, obstructs, impedes, hinders or confuses any fielder attemping to make a play. If the umpire declares the batter, batter-runner, or a runner out for interference, all other runners shall return to the last base that was in the judgement of the umpire, legally touched at the time of the interefence, unless otherwise provided by these rules. In the event the batter-runner has not reached first base, all runners shall return to the base last occupied at the time of the pitch."
By Rule the penalty for Interference is: "The runner is out and the ball is dead." He awarded the batter-runner first base correctly.
Also you should refer to the Sporting News official baseball rule book Rule 7:08(b).
