Colorado has a castle law, but you still have to have a reasonable fear for your life and limb. In this circumstance, with both parties calling the cops like they did, I doubt it would hold.
P.s., as the CNN headline points out, the guy was an intruder. There no mention that anything was stolen. It's actually not unheard of for homeless people, for example, to enter a home for the purposes of a bath.
Who the fuck walks into the wrong house? That sounds like a moronic excuse mainly used BY criminals to get out of such things.
Happens with drunk people. In fact, it happened down in CO Springs. Drunk guy mistook a house on an adjacent block for his on the way back from the bar. Homeowners called cops and did everything right when the guy tried to force his way in. Ultimately they shot and killed him (they certainly didn't know he was drunk or his intentions) and were protected by castle law.
However, you can't just waste your drunk next door neighbor if he wanders in your open back door during the hot summer, without force or malice and clearly no intent to harm anyone or anything. (a hypothetical scenario proposed to me by a cop, when we reported a trespasser)