Really, this is a case of the road to hell being paved with good intentions.  You can see the spirit of what the IT Director wanted to do its just that the letter of what he wanted was a right pigs ear!

I've had a similar instance where we were told to comply with the Data Protection Act (UK) in terms of not retaining data without permission or once its use by date has expired.

The problem was it was insisted that if that data existed on a backup tape then we would be in breach of the act.  So, run a destructive process on data without a backup..hey wow what a good idea!!!!