That's certainly a shame.
Somebody had mentioned taser, or other non-lethal force.
I have a hunch that if he had meerly been non-compliant, he may have been shocked or maced, but once he went for his bag, which -- by his own account* -- contained a bomb, non-leathal force just wasn't much of an option any more.
Before we criticize the air marshal too much (Shoot first, ask questions later) let's just take a moment and put ourselves in their shoes:
Man running down the aisle claiming to have a bomb in his bag.
Woman running after him screaming "He's mentally ill!"
Man fails to comply with officer commands.
Man reaches for bag.
You've got adrenalin running through your veins, and a split second to make a decision that will affect the lives of hundreds:
He's mentally ill, he probably doesn't have a bomb in there.
or
He's mentally ill, what is he thinking?!
*It's unfortunate that his account was false, especially on account of all the signs and warnings around airports warning you that, well, they're going to take you seriously if you say you have a bomb on your back.