In what other job would you want someone to continue to work beyond the level of competence? The notion of that floors me.

I agree that a termination should not occur as an abandonment. The client should be given a measure of control, should be part of the discussion. There should be a time for bringing to a close that former therapy relationship as a new one is established.

But seriously, it goes beyond CYA. There is a point where a person is unable to perform a job, they need to say so. No matter what the job is.

Regarding the language and tone of the report: it was a case study. Case studies present information, they do NOT present emotions, personal details, etc. It doesn't give significant details about the discussion between the client and the psychologist: he could have discussed it with her as a heartless A-hole, or it may have been far more compassionate than it conveyed.