I agree, however that discussion should take place BEFORE the action is taken. If you are still discussing the action after you made the decision then something is quite wrong, IMO.

You did not answer my question on why the offending post which was only one of many posts on that thread could not have been deleted vs deleting the whole thread.

As far as I can tell Jim did nothing that violated the ToS in his original post. At the time I read the thread there were a number of posts on it and only one of those contained a link which you say was a violation of the ToS. Why "punish" Jim and all the people that responded within the terms of the ToS for the violation made by one person?

People delete individual posts all the time so it certainly would be within moderator powers to delete individual posts rather than having a knee jerk reaction and deleting the whole thread.