It ain't over until Congress and SCOTUS get their swings at it.
Yes, an appointee, whether or not they want to consciously admit to it, are beholden to the guy that put them there, and, admittedly, are of the same legal/political bent as the appointer. Plus, a Federal District Court is never the last stop in any legal question.
An appeal, and injunctive relief can be sought by the plaintiffs at the Circuit Court of Appeals, then, with everything returned to status quo, the Circuit in either in panel form or full-on enbanc, can rule on on the various aguements. The best argument the plaintiffs have is that the Executive, meaning the President, should have sought the advice and consent of Congress first as the "contract" could be considered as an international treaty, which requires the approval of the Senate, to abrogate. The other arguments do need to detailed more than the original complaint, but they can still be amended before the Circuit rules.
Failing at the Circuit level, for either plaintiffs or defendants, SCOTUS is the final arbiter. Technically, if the "contract" (a very dicey legal term to be used in this case) is found to be a "treaty", then SCOTUS, under Article 3 Section 2, as has been already determined by prior courts, is actually the court of "first hearing" (meaning, in terms of treaties, all lower courts can be bypassed and SCOTUS can hear the case directly, without having to drag it out in the inferior courts). Congress can, of itself, simply pass a law reaffirming the "contract" of ICANN, stopping any other authority to take control. Then the case would have to go through at least 2 circuits with opposing rulings in equity, then SCOTUS can take the case, but only if the "agreement" is called a "contract" and not a "treaty" (all three words have very specific meanings in in US legal parlance).
No matter how this turns out, the fight is long from over. The world may not like it, but American technology made the Internet possible, and therefore the country does have certain "property rights" to who or whom controls it. The last word has not been uttered and the "fat lady" is off stage.