It's not a bug. A lone king is "insufficient material" if the opponent is the one that runs out of time.
Think of it this way: Player A can't win because they ran out of time. Player B can't win because they don't have checkmating material. Since neither player can win, the result is a draw.
Looks like black ran out of time and white couldn't be awarded the win because all he had left was the K. Where's the bug?
EDIT: Day late and a dollar short again! 
Sorry guys, after posting this i found another older thread where it is explained that this is actually a FIDE rule.
Kotika: Where is that older thread that expains the rule?
Kotika: Where is that older thread that expains the rule?
down in the basement with the rest of the old threads !
Do a search on here for insufficient material and there are plenty of them, but basically ....if your opponent runs out of time, then for you to win YOU must have sufficient mating material left on the board. This website uses a hybrid USCF rule to determine insufficient material... a lone king/king+N/K+2N/K+B is insufficient material to force a mate and is a draw.
FIDE has more relaxed rules which would allow a win in some circumstances if you have a k+ another piece , even though it would be declared a draw on this site.
Poor people trying to win with K+N vs K+P and K+2N vs K+P (both of which can be forced wins)
the system sometimes judges a game to be a draw with insufficient material, even though one of the people ran out of time, and there is plenty of "material". See my game:
http://www.chess.com/livechess/game?id=923215968