I think this award was very well-deserved. I've been using Thaler's work in the first topic of my ECON110 class for many years, especially his characterisation of decision-makers as quasi-rational, rather than purely rational. We even refer to some of his really early research, on mental accounting among buyers of pizza, in the first tutorial.
His book, "Misbehaving: The Making of Behavioral Economics" is on my list of books to read before the end of this summer, so you can expect a book review on that in due course.
Finally, I really liked this bit from the New York Times article:
“In order to do good economics, you have to keep in mind that people are human,” Professor Thaler said at a news conference after the announcement.
Asked how he would spend the prize money of about $1.1 million, Professor Thaler replied, “This is quite a funny question.” He added, “I will try to spend it as irrationally as possible.”Perfect.