I agree, I worked on Shuttle and Space Station, if NASA was certain of damage they would have told the crew. If the crew was capable of leaving the space craft (EVA) then the crew was capable of attempting repair. No way NASA would not have given them the change to try something.
I am calling BS on this story.
I would hope that if NASA knew Columbia was doomed they would have attempted something like keeping it in orbit and supplying it with life support from unmanned rockets until another shuttle could be launched for rescue or maneuvering it to ISS where the shuttle crew could wait for rescue. I think they would have tried something. At least I hope they would of.
The problem I see from the final report, that I have actually read, seems that no one on the program ($) side of the house wanted to listen to the engineers. Exactly the lesson NASA claimed to have learned from Challenger. Difficult to look for a solution to a problem no one wants to acknowledge even exits.
Management forced the engineers to prove it was unsafe to continue the mission vs. proving it was safe. As far as the DoD satellites go the engineers could not prove there was a problem until they had the pictures and management would not approve the pictures unless they could prove there was a problem.
This was purely a program decison because the management team on this flight was in charge of the next flight. Grounding the fleet for the foam/tile problem would have impacted the next flight and cost them $$.