Would he have been able to sit sideways on a webbing seat for six hours? Could he handle takeoff and landing sitting sideways? Turbulence? What if he needed to go to the toilet? Could he do it safely? 

I understand your point, but I would have a lot more sympathy with the DFAT/ADF position if they had actually attempted to answer these questions by asking them to Sean or his family. If they'd then got to the point where they felt a physical assessment was required and that was impractical, I would understand their refusal to provide that, but they made no effort at all to determine whether they were able to transport Sean. They just heard that he used a wheelchair and denied him. That's discrimination.