Nasty. Could have been much worse.
From what I've been able to gather, from various forums, it seems most likely to either have been a breakdown in communication at a badly-organised (and possibly unauthorised) 'airshow', or a straightforward act of foolhardiness by the Pitts pilot - making a low smoke-on pass without authorisation.
There are suggestions that the Pitts pilot has already 'apologised' for the incident - if so, I suspect he didn't consult a lawyer first.
One thing worth noting is that regardless of whether flying an RC aircraft on a runway during a display is sensible or not, making a low pass with people on the runway isn't. If you look at the video, it is apparent that the collision could have almost as easily occurred between the plane and one of the RC demonstrators.