Is there even a standard for how much volcanic dust there can be before airports are closed? How do they know we're currently over the limit? If they answer is that they don't really know, how will they know when it's over?
Finnish Air Force had some fighter jets in air on Thursday 15th, when the ash first hit Finland, and they've published some photos from inside the engines after some contact with ash:
Despite the lack of time, Moody made an announcement to the passengers that has been described as "a masterpiece of understatement": “Ladies and gentlemen, this is your captain speaking. We have a small problem. All four engines have stopped. We are doing our damnedest to get them under control. I trust you are not in too much distress.
I've always found the use of understatement to be an interesting difference between British and American English.
Was this a wise thing to do? What does the physics say?
I don't really understand your question. Are you wondering if maybe staying high is better because you can fly longer?
That's true, although I assume as they went down they gained in speed, which also lets them fly longer.
Air speed might make it easier to get the turbines up to speed again, but I would make an uneducated guess that the oxygen concentration of the surrounding atmosphere is more important; I think it's likely the engines will contribute much more to turbine rotation than air speed.
Moreover, the engines won't come up to full power instantly; they will need time to throttle up as well... in this case, glide time is more important than air speed.
Ergo, the altitude is more important for the purposes of restarting the engines. (... Except for the "tangential" need that the operator needs to be conscious to restart the engines, and thus needs sufficient oxygen concentrations in the cabin)