Beagle, I would have thought that the explanation of the CAA in that situation would be even simpler. In order to act as PIC of an aircraft you have to be qualified on type. Since the instructor did not have a tailwheel endorsement, he/she would not be qualified to command a tailwheel aircraft. Simple.
I know there are a few exceptions to this with regards to multi-pilot aircraft on long legs with cruise relief pilots on board, but that doesn't seem to be applicable here, does it?