A self-serving account by the affected author is here.  What's clear, and clearly improper, is for journals to accept and even publish papers, and then retract them after the editorial process or publication process is complete unless there are issues of academic fraud.   If the journal publishes an awful paper, its reputation deserves to suffer.  Members of the editorial board can resign or call for reform of the editorial process.  But acceptance after normal review and then rejection isn't an option if a journal aspires to be a professional operation.  The two mathematical journals have disgraced themselves two times over, since the paper in question does appear to be quite bad (these are criticisms from Cambridge mathematician Timothy Gowers, a former Fields Medalist, i.e., a really good mathematician!), but the journals also acted improperly. 

The author of the retracted article was also mistaken in calling on the University of Chicago to discipline the mathematicians who complained about his paper; they adopted the wrong course of action, in my view, but they did nothing that would justify discipline and the University of Chicago was exactly correct that they acted well within their academic freedom rights.  (It is ironic that the mistreated author would not recognize the wrongfulness of his own conduct!  It's also ironic he doesn't realize that it is part of academic freedom for University of Chicago faculty to disagree with the university's statement on free expression.)

(Thanks to David Austin for pointers.)

UPDATE:   It turns out that the "self-serving" account isn't quite right, unsurprisingly!