I don't follow what dual registration would have brought to the table. The MoD does charter civilian aircraft whenever suitable. But surely aircraft flying under civilian rules would not have been able to fly into the Libyan desert without permission (whether owned by MoD or not)? Correct that if I'm wrong as I know little about civilian rules. Had permission been obtainable and the job safe, I'm pretty sure given how stretched the Hercs are that civilian charters would have been used.
You are suggesting it is wrong for the military to take work away from civilian operators. Agreed and there are rules in place to prevent it. If your suggestion is aimed at preventing a hypothetical reliance on a free taxpayer-funded evacuation at the expense of commercial operators then I see your point, but it isn't necessary for the aircraft to be on the civil register to charge pax fares. I know too little about what went on to speculate whether anyone was reckless in this case. But, in general, if you argued that MoD should recover the costs from any company or individuals who were reckless, then that makes sense but it doesn't require a commercial arm.