The decision to continue or return, to declare an emergency or not, rests with the captain.
He elected to return. Fine. Had he continued with only one hyd system u/s, that would have been ok too. Boeing does not say land at nearest airport with this failure. You are (correct me if I'm wrong) ok for ETOPS with two hyd systems.
Mayday? I don't know. If you declare emergency, you pretty much shut down the airport. We return for a multitude of reasons. If we all shout mayday every time "just in case" or to be able to "do what we want", it will have a big impact on everybody else.
Mayday have a definition. Why not use it to decide?
What is wrong with Pan?