There are variables we don't know about, so it's a bit futile to discuss whether a lawsuit is fully justified or not. But I think there could definitely be enough warrant for this to go to court.
Like a previous poster said, she likely entered this contest in "good faith," and if the station failed to acknowledge the risks of water poisoning and failed to have her sign a waiver, then the station could be at fault. For something like a contest, the "burden" is on the station to do a little research ahead of time on what the risks are, make this clearly know to the participant, and have them sign a release.
A defense that I could see the radio station going with is that water poisoning is "so rare" and so "out of public knowledge" that they did not think it could ever occur, less that it could have crossed their mind in the first place. You would need "experts" to testify whether this is a good defense. Seeing that a couple years ago a CS Chico pledge died of water poisoning, you'd think it would be more in the public eye around here in Northern Cali.