Thanks for the replies but it's really not making it clear.
The story you referred to indicates that it was an out of control RC airship (blimp?) and was flying above 1000 feet at 2 miles from an airport which absolutely falls within what I've read as being illegal. (loss of control as well). The map you linked to is great and shows a rough radius for the restriction but again I still understand that restriction to be 400 feet high.
From DJI's website they show the Brisbane airport restrictions
http://www.dji.com/fly-safe/category-mc
and even show a video where they explain the restrictions and that they had consulted with the air regulators worldwide for the guidance. Australia being the first country to implement restrictions I imagine they had some input (even America's FAA regulations are based on Australia's CASA regulations).
It also states that there is a 35 foot height restriction at the edge of an airport's 3 mile radius (not diameter) which then gradually increases to 400 feet at a radius of 10 miles (or generously covering the 3 mile distance from airport). Now this is not a legal restriction, this is just DJI playing safe and by the rules as 400 feet altitude is permitted up to the close proximity to an airport (just really stupid) hence their compromise for safety.
The DJI site also has a question or suggestion email so I've fired off to them for some clarification, maybe even get them to add the Archerfield airport.
An interesting thing I found is that the small prop planes don't have GPS and as such can't be tracked like you can with some Apps (you know point your iPhone at a plane flying over and get ALL the information including altitude). My pilot buddies say they bring their own iPads to use for GPS and mapping and that sometimes they do fly under 500 feet even though they're not allowed to.
I will apply to CASA for permission but I doubt it would be approved but maybe I can at least get clarification from them.
The questions still stands as to what will happen in the future as more and more toys get cheaper and more advanced. I understand the regulations are being changed and might see some movement in 2015.
