And I didn't like that either. I've been a huge critic of the CIA, most recently here. http://wordforge.net/index.php?threads/the-untold-history-of-the-united-states-ii.111660/ that topic has yet to have been taken up.
As general policy I would prefer a civilian to a vet as SecDef. However in this specific case I can't think of a better choice. Mad dog will tell it like it is and no one can claim he is holding back.