Having read the book, I understand operationally why they couldn't do it; but in general terms the lives of 1,000,000 foreign civilians are worth less than the life of one American soldier, sailor, airman or marine so far as I'm concerned.
I found the book to be an absurd politicization of a factual event that was a disservice to the men involved in those operation, to include the 19+ men that lost their lives trying to extract Luttrell and his fallen comrades. Luttrell would have done better to simply state the facts. Lt. Murphy's family wasn't terribly pleased with his account of the events either. As he was the "Lone Survivor" only he knows what the facts truly are.
Killing civilians is tactically, operationally, and strategically stupid. It is also immoral. Thus it is illegal under the UCMJ. There is no way this team could have ever legally shot a goat-herder under the presumption that they might tip off the enemy.
Luttrell devotes a lot of ink to whining about the ROE. There is some room to question the sense of the ROE. However, not in this scenario.