I looked at the ISI site and their Sport Accident Policay states (paraphrased) it covers accidents incurred while an ISI member is ice skating (period). Nothing about practices, competitions, etc. Plus the ISI policy has a $1000 deductible.
You may disagree with me, but here is my take on this:
The USFSA was formed for the explicit stated charter purpose of helping U.S. elite athletes win International ISU competitions. For the most part, a few thousand dollars here and there aren't an overwhelming issue for the elite athletes, most of whom probably also carry very good health insurance of their own. They don't really need this insurance.
The USFSA also supports associated clubs and associated professionals.
This page http://www.usfigureskating.org/clubs?id=84048
make it clear that USFSA insurance is really meant to protect coaches, clubs, and club officers, from liability suits, not individual recreational skaters.
In the sue-happy USA, you can sue a skating club, skating coach, or skating facility, for injuries received while skating. Are legal system being what it is, you might even win. They might well give you more than this insurance policy itself covers - e.g., for "pain and suffering", "loss of work", etc.
I.E., the insurance Company was not trying to help the o.p., who is not their nominal customer. They hope that by giving the o.p. some money, they will prevent the o.p. from suing coaches, clubs, facilities, and their officers. For those people and organizations, defending themselves against such a suit could cost much more than this small payout. Losing the suit could cost even more.
I realize that USFSA's decisions, over the past few years, to advertise and push LTS classes, make it seem that they are interested in supporting recreational skaters. But that isn't their charter purpose. Perhaps it is a meant as way of raising more money to support their elite athletes - and to support USFSA member coaches.
Many sports organization and sorts teacher certification programs offer liability insurance for professionals and organizations - e.g., the American Canoe Association offers insurance to canoe and kayak instructors that they certify. And many sports clubs buy insurance to protect themselves, their officers and their event leaders. No one really expects them to help individual participants, except incidentally.
It doesn't mean the USFSA is doing something wrong by offering a non-comprehensive policy. They just don't happen to provide all things to all people. The National Cattlemen's Beef Association doesn't have to provide consumer health information to the consuming public. That's not their job. Likewise for the USFSA.
ISI was formed to serve a less exclusive group, which includes elite and non-elite skaters, their coaches, and the facilities that support them. So while ISI offers insurance for professionals and facilities, they also include insurance in all individual skater memberships http://www.skateisi.com/site/Sub.Cfm?Content=membership_individual_eamc_coverage_summary
which is meant to help help recreational skaters too. It was potentially even more useful before the "Patient Protection and Affordable Care Act" (Obamacare) made health insurance more commonplace - although many people opt for extremely high-deductible health insurance, so it still applies.
All I'm saying is that the USFSA isn't doing anything wrong, compared to the ISI. One just has to understand who they are there to serve. It might be nice if they offered better insurance to recreational skaters, but it isn't central to their purpose. I don't find it troubling that their insurance isn't as good as some might want it to be. I'm surprised the insurance came through as well as it did for the o.p.