Caution: My NFHS rule book is from 2006.
Rule 6, Article 3 talks about pitching from the stretch position. A lot of things are said but the relevant part is:
"He shall come to a complete and discernable stop (a change of direction is not considered an acceptable stop) with the ball in both hands in front of the body and his glove at or below his chin."
The rule book then goes on to describe the penalty for Articles 1, 2, and 3 as follows:
"The ball is dead immediately when an illegal pitch occurs. If there is no runner, a ball is awarded to the batter. If there is a runner, such illegal act is a balk. In both situations, the umpire signals dead ball."
So, it seems that it was a balk. But, even if it wasn't, it would probably be too late to do anything about it unless a formal protest was made to the umpire before leaving the field.
But, assuming the pitcher had not already received a warning from the umpire, I agree that was a pretty crappy call to make that late in the game and in that situation.