Look, this is not an average melee or free-for-all, it is a duel of honor between two parties
In which there are, typically, explicit rules regarding what is allowed and what is not, either specific to the duel in question or across the board within a society wherein such events occur. That is, to me, a separate issue from whether or not Ulfric's use of the Thu'um was a violation of the Greybeards' philosophy.
I have not heard one NPC refer to any rules or laws regarding how duels of honor in Skyrim are to be conducted. They might not like what Ulfric did, they might disagree with how he did it, but calling the end result "murder" does not make it so if both parties accepted the terms and neither party broke them (assuming there was no explicit prohibition on use of the Thu'um) or both parties were content to begin without explicitly stating and agreeing to any terms whatsoever (in which case use of the Thu'um could not violate terms that did not exist).
Heck, even the drunk who challenges me to brawl him in the street knows enough to say "no weapons, no magic"... but Jarls and Kings can have duels to the death and nobody thinks to say "okay guys, weapons only, none of that shouting business" before it starts? Because nowhere do I hear that any terms were set, agreed to, and then broken.
I hear that some people thought it was awful and unfair and wrong, and some people thought it was perfectly fine. All of that is just opinion unless there is clear evidence otherwise that is not tainted by preexisting bias or undue emotional involvement in the outcome. And that goes for both sides of the argument, my own personal biases notwithstanding.
If there are no terms going in about what is allowed or not allowed, and there is no single clear and mutually accepted code of conduct deriving from tradition,* then... yeah, what you got there
is actually a free-for-all, because no one has agreed on what's kosher and what's not and the only sensible presumption for anyone to make is that anything goes. IMO you'd have to be a fool to enter a life and death battle and
not assume that in the absence of any explicit reason to believe otherwise.
Basically, until I see evidence (or even any indication at all) that Ulfric agreed to terms for the duel which he then violated, then as far as I'm concerned the use of Thu'um did not cross the line in any "legal" sense.
*And I'm gonna say there isn't, if the varying reactions of Skyrim's people are any indication.