Ultimately, it will have to be a personal decision of a person holding the camera. The bottom line is, the law says people have no expectation of privacy in public areas. But - think of this... there are people with problems we can't even imagine, let alone think in their shoes. Some are just plain strange. It makes no difference if it's real or percieved - pain they feel is the same - just because someone took their photograph.
In some cases, people live in constant fear of real life threat but they can't stay home because they have to make their living and actually live.
Most of us take photographs for our enjoyment. It doesn't kill me to dump a roll or push the delete button. Street photography isn't something I do, so I rarely encounter these situations. If someone is in the frame and prominently enough, I usually ask first.
I read somewhere, even photo journalists sometimes hesitate and not take the photograph because they feel the pain themselves. Whether that makes a good person or a bad journalist, I don't know.
I think there is a real problem discussing topic of this nature. Other than the OP, we don't know how the conversation really took place. Other than the woman, no one knows why the photograph (which she didn't appear...) was percieved so damaging. Of course all the folks responded don't have any of these information and the discussion becomes concentrated on how our rights were violated. In reality, there were a lot more going on when the event actually transpired.
I consider the "law" the last line of defence, not the first. There are a lot we can do without being illegal. There are a lot of damage we can cause while staying legal. In these situations, I prefer to enjoy my hobby while causing no harm to others - real or perceived. How much margin one wants to keep is really a personal decision.
I said everything I can say here so I'm out of this thread. I don't plan to change anyone's mind. Just wanted to present something some may not be aware - when discussing our rights to photograph in public places.