I am not going to go over this again, but you cannot just assume things, as nice as it would be. In most cases, guards probably would have given maximum discretion but it is not an entitlement.
Edit:
I agree with transmanche that this thread has run its course as there was not really anything new being added in the last few posts.
There is clearly a right way and a "right" way in this case. While the guard may not have done things the "right" way, I am not sure how complaints about him not doing things the right way is going to stick. Not everyone is going to agree and we'll just have to call a truce on this.
There is a lesson to be learned from this unfortunate incident by both sides. London Midlands may wish to rebrief their train managers as to the real purpose of not allowing purchases onboard with discounts and reinforce the idea with them that showing appropriate discretion in situations such as this could be beneficial for the company and industry on all fronts. For passengers, make sure you ask the right questions, if you can, and never assume anything. I certainly hope that such incidents never befall any other unlucky punter like the OP's wife.