Well that was simple incompetence. Hill just didn't know how to correctly interpret the visual data presented to him. Warne has explained it beautifully, and it just beggars belief that they don't go through this sort of thing with these 'elite' umpires in advance. Certain things look a certain way on the replay. When the ball doesn't carry, it never looks like that.
In all honesty, this one is unlikely to really cost us much more than annoyance, and it's not as if all the bad/questionable calls have gone against us. But it's not good enough at this level. I've got no issue with Bell either, he's entitled to have it checked whether it carried.