It might seem unfair, and the circumstances are really exceptional, but them's the rules and if they haven't made a provision for this sort of thing happening then they will be in future.
I just checked and they turned over €2.9 billion last year, making €100 million profit. I bet they have the cash reserves to do it (in fact the same report says they spent €1.3 billion on fuel last years so 1 week with no flights will save them €25 million in fuel which would pay for a quarter of a million extra nights in hotels and food at an average €100 per night) He's trying to avoid his obligations to save his profits which is what you'd expect him to do. Expect to pay more for your Ryanair flights in future though.
I think the point is that yes, there are rules in place, and it is indeed nobody's fault... A very definite force majeure. And precisely because of both those reasons, to me, whether it is or it isn't in law, it should be a case for the insurance companies. I hate to sympathise with Mr. O'Leary somewhat (only very slightly though, he is one of, if not the most, questionable businessmen on the earth's face, and he's also saving Millions on fuel for a week as stated above) but to some extent I do agree, why should the airlines compensate the passengers? Certainly I feel it's only proper that they refund the cost of the ticket, but why should they have to compensate for any additional costs? To me this should be a job for the insurance companies.
Anyway, whatever any of us think is kind of irrelevant. There will be some guaranteed outcomes of all this you can bet your bottom dollar though. With fuel prices at a record high at the moment, meaning some airlines are only just breaking even on the cost of many of their flights. Fuel prices used to make up under 10% of the cost of an airline ticket, these days it's more like 50-60% of the cost of the ticket! And fuel prices aren't set to come down any time soon. And neither will insurance premiums now, I should imagine that they will suddenly sky-rocket!
So the guaranteed outcome is that air travel is going to cost significantly more and very, very soon!
I'm more worried (long term, short term shouldn't be affected too much I don't think) about the company I work for. We make money servicing the landing gear for many commercial Airlines (RyanAir being one of them), our boss briefed the company today that he will be holding "risk assessment meetings" with the senior managers soon to assess the likely risk on the company of the volcano's eruption on the business. Short term, there won't be any effect, the planes are only grounded for a few days, a week at tops (and the gears only need servicing every 6 years or so), but long term this might reduce air travel significantly... Possibly a good thing for many to be fair, but it would severely impact on my employer's sustainability in the future.