They were right not to give up their ID's. Once the cops have your ID, you aren't really free to leave. They could then nab you for driving without a license.
Maybe in MI. In Ohio you have 24 business hours to produce your license to the court. If the series of events you described were to actually occur then and citizen with the gumption to pursue a lawsuit would likely find the endeavor financially rewarding although a headache.
Sorry your experiences in NO have been so hostile. My experiences in Ohio, including Columbus and around even Dayton which is not exactly low crime, have been very satisfactory. It takes a few people pushing social limits for those limits to change. I think the reason OC'ers in Ohio now meet so little resistance outside of a few well known and legally besieged municipalities is that a few people did most of the heavy lifting on LEO awareness shortly after OC/CCW became legal by challenging law enforcement in the way these two did.