Maybe this is just semantics but I don't think we're really talking about "IWR" here. In-water recompression refers to a treatment protocol applied when a diver experiences DCS symptoms after doing some kind of deco and then surfacing. An IWR protocol would look totally different from a regular deco schedule. But if the instructor in this incident had descended again immediately after passing the student to the boat crew then that would just be resuming the deco schedule where he left off.IWR has its own risks and current thinking is that it is a last ditch effort.
On the other hand, another recollection in this thread says that he chose to just have oxygen on the boat, presumably not to delay transport of the first victim.
One option to potentially consider in such a situation is for the boat to leave the rescuer to decompress and rush the victim back to shore. Then return to recover the rescuer, or get another boat to do it. It might seem irresponsible to leave someone alone underwater in the open ocean but most of us who are doing offshore tech dives now have an array of surface signaling devices including some sort of radio so the risk of getting lost at sea has been greatly reduced. The boat crew can also drop a float ball with a weighed line to mark the diver's position and give him a stable reference. If it was me I'd rather roll the dice on that instead of severe DCS.
Of course it's easy to come up with better plans when we're sitting safe and dry at our computers.