I agree with this.Yes, but imagine how much easier it would be for a guard/RPI to point out the rules by saying 'Can you read that on your ticket sir/madam?' - which will in turn stop all the other passengers around taking sides, often against the evil railway.
It's a case of 'every little helps'.
I'm still a 16-25 railcard user, so am too young to remember, but am I correct in thinking that railcard tickets used to be different colours? That would be another way of differentiating them from undiscounted tickets, though probably not practical in an area of TVMs.
I think in general that guards are right to not use discretion in these circumstances, not least because these railcards are often held for years - 9 for a 16-25, and longer for a senior. If you get charged full fare the first time you forget it, you're not going to forget it again.
I'd like to see more effort be put into a system that allows people to reclaim fares if they can return to a ticket office with their railcard. I realise that there are obstacles to this, and these are reasonable to raise. Equally, I don't think it's impossible with a bit of effort. However, I don't think there's any money in it for the TOCs so don't really see the incentive for them to do so!