Luther could do anything to simply wipe the pesky data. Having the knowledge of meta-recognition, and understanding the tenets of programming, he could have simply borked the coding, or changed the binary data to make Terra Jogurt.
But he made a mistake. He played with his chances. And, for that, he would pay... painfully so.
You see, he decided to randomly swap her binary coding for added laughs. However, the clash of data with her Morph programming code led to a monstrosity. After the change, Morph led Terra to turn into FFX-2 Esper Tina Branford, with a Songstress Dressphere and a full mindless j-pop repertoire built-in. When Terra tried to transform for the battle, all hell broke loose. In no time, everybody was picking up their DS portables and tapping furiously to Ouendan 2. Even Luther himself. However, he was so bad at it that he botched Zenryoku Shonen on Easy one too many times, and left the arena in frustration.
Afterwards, a very confused Terra was given the win by default. Edge and Yuri are just waiting for the dust to settle down so they can start selling the pictures they got.