Flexibility in Opening two in third seat with 8 points and seven card suit?
You are, within certain constraints designed to prevent wholly destructive bidding systems, allowed to make any call that is:


any of a sufficient bid; a valid Double or Redouble; or Pass; and
not otherwise constrained by penalty under the Laws of Rubber Bridge consequent to a prior irregularity.


However your opponents are entitled to a full and complete description of the agreements and understandings between you and partner.

In particular, you are most definitely entitled to make a call based on your understanding of the opponents methods, in the context of the current auction. But if you make a habit of certain actions in common circumstances, such as a third hand opening following two passes as here, this must be added to the partnership agreements made known to the opponents.

Nothing you have stated in your post suggests to me that your opening bid is inappropriate. While not a call I would likely make myself, I see merit in your reasoning when playing against timid opponents. 

It would seem that your opponents on this hand have conflated the rules of the announced bidding system (really just guidelines for improved play and partnership harmony) with the Laws of Rubber Bridge.