So what you're saying is that Sony doesn't have an auto-flag system? Because I'm entirely certain they do. So unless he's responsible for updating their list of auto-flagged words, perhaps Sony should stop blaming him for their mediocrity. Why should it be his responsibility to think of the negative context, but not Sony's?
They should auto flag stuff like this of course however every TOS (and I'm quite positive it would be the case here) will have provisions about creating offensive usernames so it's his responsibility also. In that time frame, jihad had essentially become a word only associated with terrorist activity.
They offered him a name change before so they must have some way. I know we can't change our psn name otherwise.
So why didn't he take it?