Ofcourse this guy is an idiot for doing what he did, but there is no need to overreact to the danger involved.
Virtually all non-US airlines allow passengers to carry a lighter and/or safety matches in the cabin - not a blowtorch, but just an ordinary cigarette lighter which is not suspicious at all in combination with a pack of cigarettes.
Strike-anywhere matches are officially prohibited on airplanes mostly, but very few people use those anyway -the kind that requires the box to spark them is usually no problem.
This should not be a safety problem though. Millions of people fly every day carrying lighters on commercial airlines, but very very few of them try to set fire to something in flight. And the ones that do are probably people trying to have a cig in the lavatory whilst covering the smoke detector, not terrorists.
Using a lighter in flight is not dangerous by any means, as long as you do not set seats and such on fire. Remember people used to be allowed to smoke on airliners 20 years ago without any problems. The no-smoking light is there to prevent people burning themselves (or others) whilst smoking in turbulence, and has nothing to do with fire from lighters or cigs being a hazard to airplanes at all.