"Could someone enlighten me on why the stool fetched that price?"
Any certifiably American colonial-period stool is an incredible rarity, orginal fabric on an upholstered piece is even more rare, and Queen Anne period furniture is more rare than Chippendale. While the Sotheby's description notes that it was re-upholstered, it was done so with original period fabric (which is also extremely rare). The Sotheby's description doesn't note when the re-upholstery was done, but it might have been a period repair, which make it almost as good to a collector as orginal upholstery.
The interesting thing to me is that rarity seems to trump all else in colonial period furniture - there was also a very nice Chippendale oxbow chest of drawers in the same sale, with original brasses, attributed to John Chipman that went for just under $200,000. Now, assuming you had the bank account to support such a purpose, which would you rather have - the footstool for $5 million +, or the Chipman chest of drawers for $200,000? Personally, I'd much rather have the dresser.