Moderating shouldn't be about you. It should be about the site and a consistent application of the site rules. Aside from your moral objections to the OP posting the story, I'm not immediately aware of any actual MGoRule the OP has broken. I know mods have a tough job, and I appreciate that you do it. But I think you've been pretty heavyhanded on the OP for something that's pretty inocuous, in a way that I haven't seen happen around here just about ever.
Sure, the guy melted down after the fact, but that was largely a function of everyone piling on to get in on the Bolivian fun. But ultimately, I think you're being a little unreasonable and inconsistent with what's worthy of being posted and what isn't, especially if you're going to leave the thread open and keep defending your decision while the OP gets further shamed.
Just my $.02.