Why not? If you are impacted, why not? When do you have a standing then?
Visitors out of town have less standing than the people paying taxes to the town, that is fair, but the city IS the people, each and every person, not an abstract third party that herds them like cattle.
That's not absolute. There can be other cases where you have standing even if you aren't involved in the transaction but those cases are limited.
Now it's also possible that the deed wasn't properly recorded. If it was, there might be more people who have standing, such as those near the project who are negatively impacted. It's possible that the district court erred or maybe the people bringing suit didn't live in the area or otherwise have standing.
It does seem wrong that you can effectively invalidate a deed restriction by simply selling it enough times.