The Boeing QRH then (and now) states that in the event of vibration to retard the thrust lever until the vibration ceases (if necessary to idle). If the vibration continues (highly unlikely at idle) Boeing stated "other engine problems may be indicated".
So, in my opinion, it was procedurally incorrect to shut the engine down in the first place, given that the engine was misidentified.
But like the holes in the proverbially cheese model there were many factors in the Keqworth accident. What about the lack of certification of the engine in that airframe type - engines shouldnt throw blades! But in our business sometimes s**t happens!
There is a difference between vibration indications which are displayed on a gage within the cockpit and vibration which is suddenly felt in the cockpit. Vibration gages alone are not reliable indicators of an engine malfunction anymore than fire detectors in a cargo hold a reliable indicator of a fire. For a variety of reasons associated with the gage and detection means, false indications are common. Thus it's important to follow recommended procedures regarding the engine to ascertain the extent of the problem before giving up on the engine and turning off not just the thrust but the accessories that go with it.
However step changes in vibration felt through the airframe are genuinely real and as such a scan of the engine gages over several seconds would confirm if a specific engine was involved.
Regarding the cause of the blade failure itself. Engines are not certified not to fail (sorry for the double negative, but that's my point) They are however certified to be able to be shut down safely within a reasonable time frame (like 20-30 secs). I don't recall that there was a shortfall in this regard associated with the Kegworth accident.