You've kind of hit the nail on the head in terms of the validity of animal studies in medical research. We use them out of necessity because we obviously can't subject humans to similar experimental procedures, but the data is often difficult to extrapolate to humans. I would be especially wary of extrapolating information from Drosophila (which I'm assuming was their model system) into humans, because we don't share a lot of features in common with fruit flies.
That said, it sounds like the target of their study wasn't to suggest that coconut oil was bad, but instead to investigate the genetic elements that might render individuals more susceptible to cardiac damage on a high-fat diet. Their use of coconut oil was probably due to its relatively easy availability and combination into fly food. Flies are a particularly useful genetic tool for things like this because there are vast libraries of flies with specific genetic defects; the authors hypothesized that the target of rapamycin (TOR) gene, which is a powerful central regulator of metabolic function, may play a role in the genesis of obesity-related cardiomyopathies. They found that TOR mutant flies had reduced incidence of cardiomyopathy compared to the control flies fed high-fat diets. This led them to evaluate the contributions of the insulin-TOR signaling axis to this process, and they found that inhibition of insulin-TOR signaling also protected flies from fat-related pathology.
Ultimately, what they found shouldn't deter you from coconut oil--they just used that as a model to make the flies fat quickly. They showed that, at least in obese flies, insulin signaling axes promote the development of cardiomyopathy and that interruption of those axes can protect against those outcomes. This probably is of importance in humans on some level, and as an early study provides some interesting groundwork for examination of patient populations and more complex animal models. Incidentally, it also fits in pretty well with what the paleo nutrition community already practices in terms of insulin level maintenance--that you should keep constant, low levels and not have spikes, as these can mess with your metabolism.
Hope that helps!