Mike,
The correct action from the dealer should have been to stop the two cards from hitting the muck (freeze them), and call the floor. As long as the player had 4 cards, the best hand would win. Too many dealers refuse to call the floor when they should, and get themselves in trouble for making decisions that they should not. The player should be given a warning, and if he continues to show only two cards, he might be asked to leave a cash game. Tournaments are different, of course, but I would still have a tough time killing the best hand in this situation. The Dealer's responsibility is to control the game and prevent any irregularities, like OOT action, or unclear bets. Well trained dealers should know all of the rules for the games they deal but, it is not up to them to make any decision at the table.