Let's not make this a redemption value debate pls.
5,000 miles for denied entry is interesting. The pax clearly had an eligible entry situation. I share their frustration.
This is a good example of being certain of your lounge entry access criteria may have helped. If there is a controversy like this, ask them to call their supervisor. Worst case, buy a day pass and then mail the receipt in, DL would refund it ... Plus a few points, I suspect...