First thought is that the controller was right. Not having plates to hand, I don't know the length of the taxiway concerned, but there may have been doubt as to performance. There is also the matter of obstacle clearance after departure, infringement of other runway departures etc. Apart from trying to prevent an accident, there is also the matter of the licence in the subsequent accident inquiry. "So, Mr. Controller, you say you saw the aircraft taking off on the taxiway? Did you not do something to prevent it?" Yes, I'm also aware of the potential overrun case, but the controller didn't have a lot of time to think. Full marks in my book at the moment.