You pretty much answered your own question. It's a common misconception about where the goaltender is considered to be, but it's almost identical to the offside rule. Skate contact with at least one of his skates in the crease (which includes the surrounding red line) is sufficient for the goaltender to be, by the rules, defined as being in his crease. The phrasing is also important. This is rule 69.3 verbatim:
69.3 Contact Inside the Goal Crease - If an attacking player initiates contact with a goalkeeper, incidental or otherwise, while the goalkeeper is in his goal crease, and a goal is scored, the goal will be disallowed.
The bolded is the key phrasing (as opposed to the simpler, technically inaccurate, "contact in the crease"). The actual contact can be above ice that is wholly outside the goal crease, but if the goaltender has skate contact with the goal crease, he is considered to be "in his crease." Now, the question of whether Stepan initiated contact or not is subjective. I guess Toronto thought he did.