Pirate,
I am aware that the soldier's passport was kept by his regiment - perhaps for perfectly sound reasons.
However, I simply do not believe Ryanair have got it wrong at all, whatever proverbs you may choose to throw into this argument.
As I have said, their rules are clear. You can choose to ignore them, or plead mercy - this may work, and if does, good for you. But you cannot blame them if they do decide to play by the book - again, most probably for very sound reasons too (and I doubt those have anything to do with gouging more money from customers...)
I also understand this young man's mother actually phoned Ryanair before he had even reached the airport in order to check whether the airline would accept his military ID. The answer was an unambiguous "no".
You decide.
I remain convinced Ryanair acted appropriately.
I apologise if that sounds unreasonable, but that is my opinion.
Playing along with the spirit of your proverb, I suggest a wise man might have been guided, by his good judgement, to comply with Ryanair's Terms & Conditions, knowing full well their tendency towards inflexibility....