The government is far more concerned with knowing who is entering and leaving the country (hence your problems on the Victoria Clipper) then on who is travelling from ALB to SEA, especially given that you father, whoever he may be, passed through security before boarding the aircraft.
On a side note, proof of citizenship is technically required when travelling between the USA and Canada. A driver's license is not a proof of citizenship, although it is typically accepted as such for people travelling between these two countries.
Consider what would have occurred had he been travelling on an expired passport. The airline may let him fly, if despite the fact the passport is expired, the name and photo are still your father (albeit a slightly younger version). Alternately Immigration/Customs would be more reluctant to let him enter/leave the country given the functions of a US passport when traveling internationally.
However, in my opinion, the airline employee probably did not look at the expiration date. Plain and simple.