So, this incident clearly deserves a discharge, or at a minimum, shipment home for retraining. The soldier in question is a risk to do something similar in the future, it's shitty for morale, etc.

The incident described in the article (as least as the perpetrator describes it) sounds like a mistake made by multiple parties--the ground commander, the wingman, and the shooter himself compounded by bad weather, instrumentation glitches, and lack of sleep. The incident deserves a thorough review but seems quite a waste to discharge the shooter, a Lt Col, if it indeed went down as he described.