Very simply I believe the Captain and airline overstepped their authority and responsibilities. The rights to refuse carriage revolve around the passenger threatening the safety of the aircraft and crew i.e. drunkeness, serious aggression etc.
If I was that passenger I'd sue the arse off them for delay caused and no doubt win when they cannot prove the passenger was a threat of any of the above as laid down by IATA, ICAO and CAA guidelines and make the company and Captain a laughing stock by running the story on through the press etc.
Especially in this case the replacement crew should both understand that passengers are likely to be highly irritated by the events and as such make every effort to appease that situation and communicate/act accordingly to defuse such problems. This Captain appears not to have made any effort to empathise with the situation. A smile and a joke from the Capt. at time of comment not doubt have made for a pleasant atmosphere for everybody, cabin crew and pax. alike.
The success of any flight depends on everyone working together on making the flight a good experience for the customers and that includes the Captain!
Although as airline management one should always support your crews' right and decision to refuse carriage for reasons as detailed in my first paragraph...in this case I would be asking Capt. Crook for a very good explanation
We've all been there both as the angry pax. and as the staff member receiving the flack of someone elses problem transposed later on to our shift.