This would make sense if this were some sort of grey area. But it's not a grey area, not even close. There's no judgment call to be made. The ATF is very clear on this subject.
It's so clear, in fact, that it's written explicitly on the 4473 itself. First, the instructions on the back of the form say it clearly, and then there's even a separate box right on page 2 for the dealer to record that an additional document besides the ID was used to prove residency.
The OP had the proper documentation that the ATF says is required for him to buy his shotgun. The dealer still denied the sale and claimed that he was following the law. That's not "protecting his FFL", that's being ignorant.
Look, if the dealer wants to make some kind of store policy that they only accept certain forms of proof of residency (maybe for the purpose of making it easier to train employees or something like that), then fine. But if that's the case, then just admit it's store policy. If they claim it's the law, then they're either lying or they're ignorant. Neither is a good trait in an LGS.