Well, I think the pax with the cat should have been reseated to the back row of EY, that being one of the conditions of carriage? -each airline will have it's own rules but the printed version I saw made it clear that one might expect to be reseated to accommodate other pax. I would get upset if they started to talk about offloading, not reseating. As a pet owner, (of pets far too large for the cabin anyway), I accept that I am lucky to have my cat with me and must expect to move if required or put the cat in the hold.
I know some allergies are extremely serious but if they are that bad then they are probably notifiable too, (therefore cat/dog refused in cabin), and the necessary remedies will be carried by the individual, antihistamines etc. Such allergies may possibly be a safety issue but otherwise it is difficult to see a safety aspect.
It was not a decision I was ever required to make and I would ask am I supposed to consider the allergic pax or the pax with animal, (extra revenue), when I make my decision?
All that said, from a personal view point only, provided they are properly looked after at departure and arrival, I think pets should travel in the hold, in secure containers.
