In the terms of the article, I wonder if the behavior your dad was displaying was more motivated by "shame" than "guilt". Shame-based responses to me seem to be much more concerned with how a social group will perceive your behavior, whereas guilt-based responses deal with the rightness or wrongness of the action itself.
It almost strikes me as a choice between a moral absolute/relativist viewpoint.
I don't know what would have been best, but especially as I got older I would have preferred complete transparency. He was a good man, but I wish I had known more about his flaws. It would have given me more insight into my own.
We were having a debate about it one time, and I asked my dad how it was that we disagreed on these topics. He replied that he raised my sister and I to have what he felt were more ethical viewpoints on various issues than what his own perspectives were.
I was astounded when he told me this. He doesn't hide what his real thoughts are, but he recognizes that some of them aren't the most kind or moral and has actually raised me to have different views than himself.
In hindsight, I think that left me unprepared for a lot of challenges I faced in college. A lot of times, I would ask him a question and get only half of a response, because answering truthfully would involve revealing less-than-ideal character. I wish that there had been more heart-to-heart and less 'raising your kid the right way'