Paper tickets do not "have" to be honored. If they cancel your reservation, a paper ticket means nothing, i.e., you have to have a reservation in order to use a ticket.

However, I would bet that in this particular situation the audit software is set up to review electronic tickets primarily and therefore had the traveler purchased a paper ticket the computer might never have seen it -- particularly if it had been issued by a travel agent.

Given that e-tickets save the airline so much money in processing costs, wouldn't it be a shame if all very frequent flyers decided to go back to paper tickets exclusively in order to reduce the audit risk??