A balloon that size would have several large tanks, but it would just take one to bring the whole thing down. From the description, the explosion propelled the balloon up, and only when the flames reached the envelope (the "bag" or the "balloon" part), it quickly collapsed, falling to the ground. No envelope, no flying--the mechanics are very simple.
http://www.planoballoonfest.org/about_balloons.htmlI've only flown once, but I have to say I was surprised at how secure I felt in the balloon--there was no swaying or feeling of height at all, and I'm not crazy about unsecured heights. The balloon I flew in was a commercial one similar to this one, and we had nine passengers and the pilot, and we had a great time. I've crewed many times when we had a balloon festival for several years here, and those pilots were some of the most thorough people I've ever met. You can cheat some when you fly a plane, but not when you're in a balloon, and these guys were sharp as a tack. I'd fly with pretty much any of them any day. I'd bet it was equipment failure, plain and simple.
This was a horrible, horrible accident and a sad day for the sport.