You would have thought that before they let him strap a Gnat on they would have asked why he had stopped flying training in the RAF.
Well he / she may simply answer that they didn't fancy the forces and/or military flying life style ( and whilst that might sound like BS it happened to one course mate of mine and also to one of my more able basic jet students a few years later...) so the fact someone stopped training leaves you none the wiser about whether they've got the "right stuff" or not.
However there's still the issue of exposure. Unless an individual is going to go off and buy lots (i.e. hundreds of hours) of swept wing fast jet time I really don't think it's reasonable or sensible for them to go off and perform fast jet aerobatic display flying in front of the paying public. Just for background I've much the same early career path as CM and Beags, and very very much agree with CM's analysis.
As for the lack of medical disclosure - we've been around the houses a few times about this on the German Wings thread and I don't have an answer.