Seriously, I don't know how you can deny him the VC without changing the rules for getting a VC to say that you must be killed during your heroics to receive one.
There was a guy last week or so that single handedly took out 100 of the enemy in Afghanistan after being wooded and he didn't win the VC. Maybe he will get it, and maybe he won't, but either way I doubt he'll have to buy his own beer int he pub for a while.
Not trying to diminish the guy you are talking about (he's definitely a BAMF too), but I'd say throwing yourself on top of a hand grenade to save your buddies is a bit "more" than gunning down tons of enemies. I mean, the guy had to have made a conscious decision to give up his life for his fellow soldiers. The other guy definitely was a brave dude, and as I said, definitely qualifies for BAMF status, however, it's sort of a different situation.
I figure the Brits have run out of metal from that damned old cannon and just don't want to admit it.
I think making it really rare is a positive thing. Really, giving an honor out too freely just makes it less valuable. There is a reason they have lots of different decorations.
There was enough metal for another 300+ VC's The cannon ball was shown on TV last year, had 14 (i think it was 14 anyway) blank VC's in the safe.
Whatever happens he should just make sure it is well documented, because otherwise his eventually grandkids will never believe grandpas crazy old war story about jumping on a grenade and surviving.