No, it should not have been stopped at that point. There was no bone pertruding and no blood visible. If the man can continue to fight and is able to defend himself, then he has every right to continue. Herbie is just "Stop" happy.
But, that's just my opinion
Another opinion I have it that Herb Dean should be fired from refing, then fired upon with machine guns, and then, and then thrown into a fire. But, again... that's just my opinion