Codswallop. The pilot made the decision, and he was at no risk of being sued, even if the airline was (extremely doubtful). I'd say that the airline faces at least as much risk of litigation because contracted service was not delivered as promised for an entirely frivilous reason. The sole issue here is that the pilot was offended and thought he'd prove to everyone he was King S--t of Turd Mountain.
Even a direct accusation of inebriation would in no way have endangered the flight or interfered with the flight crew. The pilot only had to say, "no, I haven't been drinking; in fact, I've just been tested," and that would have been the end of it. In a worst case scenario (say, a drunken passenger making the accusation in a threatening manner), the problem could have been solved by removing that passenger from that flight.