I mean...I get that his name was picked for him 26 years ago...but picking your online name as iJihad in present times? Really?
Conversely, Sony seems to have weird policies around this. Wouldn't the standard thing to be a forced name change? I am pretty sure this is how blizzard has done it with games like WoW...if your name gets reported and they decide it violates ToS, you simply can't log back in until you pick a new name. Your account doesn't get banned, you don't lose any digital purchases, etc.
And for their new universal gamer names, I think they offer paid name changes (sounds like Sony is incapable of changing someone's name without adverse effects).
Also, given that a bunch of the most popular games out there involve players playing as terrorists (in some multiplayer games, one entire team are terrorists, and in one CoD, a mission involves you joining a terrorist group and partaking in an airport massacre)...are you really not going to let some player name themselves Mr.Jihadi when that is the literal character they are playing?