From the 1/1/2003 Watchtower, page 27:
A THEATER critic for a newspaper once went to see a certain play. He did not much like it and afterward wrote: ‘If triviality is what you happen to be wanting, by all means go and see this play.’ Later, the promoters of the play published an advertisement that featured a quote from the critic’s review. The quote was: ‘By all means go and see this play’! The advertisement accurately quoted the critic’s words, but it lifted them out of context and thus grossly misrepresented his view.
That example illustrates how important the context of a statement can be. Taking words out of context can distort their meaning, just as Satan distorted the meaning of Scripture when he tried to mislead Jesus. (Matthew 4:1-11) On the other hand, taking the context of a statement into account helps us to get a more accurate understanding of its meaning.
They condemn themselves. They have themselves stated that lifting a quote out of context in a way that misrepresents the VIEW of the author is akin to what Satan did when attempting to mislead Jesus. Rama Singh's view is that some educated people reject evolution, but this is not a valid stance. The Awake misrepresented his view by using this quote to substantiate that creationism IS a valid stance.
In no way can this be construed as anything other than outright deception. The hypocrisy is magnified first by their claim to be "the truth" and second by their constant criticism of others for the very kind of hypocrisy that they commit here.
In short, no this has not been blown out of proportion. We well know that they lie and misrepresent things constantly, but most of their lies are more subtle. In this case, it's right there in black and white. This was an intentional misrepresentation of the truth, and based on their claims about how thoroughly they research and that they can be trusted completely, this is clear evidence to the contrary.