You want to get into deep semantics or what? You using the word defeat is correct, should someone lose their Heart at the conclusion of a battle they lost. Using the word in any other circumstance, though, brings about the frustration you've just seen. It's easier for you and others to simply use the word defeat, because you won't have to defend your use of it, and people won't have to get frustrated over you using it in its far-less-common usage.
The point still stands, though, that loss of one's Heart and one's defeat are not mutually inclusive.
EDIT: Not to mention, even over all these semantics, Terranort wasn't 'beaten'. He, by his own will, opened himself up the Darkness. It's not a defeat if you do it to yourself. More like a victory, since, in the short-term, he got what he wanted.