Very frustrating for all the passengers and not really something one can make and excuse for. It's not really the Captains fault though, there was clearly a problem with baggage loading or screening and the bags could not be put on the flight before departure. Somebody else ie. Operations will most probably have made the decision to go and there is very little that the skipper can do about it. There are limits to your authority and if the company want you to go without the luggage then go you will, it's not your aircraft and in that situation you really have to just bite the bullet and get on with it regardless of your own feelings on the matter. Perhaps the pax. should write to O'Leary and see what he has to say for himself, don't hold your breath though.