I grew up in MKE, and agree that the situation was completely blown out of proportion. I understand where they could have seen it as a possible threat, but at the same time, I think the TSA often abuses their "power" as in your case. If a law enforcement officer asks to see your ID/Passport, you do have to show it to them. I don't remember what the term is, but basically if you do not cooperate with the law enforcement, they have the right to detain you, in handcuffs if necessary.
Last week, my sister was in a similar situation. She's a flight attendant, and she and my niece walked me to the gate. Since my niece is two, my sister had to carry her through the security checkpoint. My sister's belt was enough to set off the sensor, so I took my niece, and she tossed her belt in the machine to be scanned. Apparently, one of the TSA ladies thought my sister had an attitude and that she was throwing her belt at the lady, not on the machine. About a second later, my sister was being stopped for a bag check. She had some lip gloss she forgot to take out of her bag. Usually, employees are not stopped for lip gloss, but since the TSA lady had it in for my sister, we were delayed by 20 minutes, like yourself. She told her side of the story to the TSA supervisor, and he basically rolled his eyes. If I wasn't holding a two-year old, I would have given him a piece of my mind myself.
I agree with your opinion that the guy is an idiot, however I'm not sure I would be as bold to display it at the airport.

Stupid bureaucrats.