First of all let me say that, as an ATCO I disagree entirely with the actions of ATC in this incident.
But with respect to this statement:
Says it all really. The PiC is the only one qualified to juge his own WX conditions. He's also the one who's skin is in danger.
I have regularly had Pilots, particularly GA and Military, that seem to think it's OK to fly VFR in IMC, even in cloud on occasion. Is it surprising that ATC sometimes take a cynical view when a pilot states that they are VFR in marginal conditions?