When can a professor refuse to sign off on a committee-approved thesis?
From a mere common sense perspective, this is, clearly, grossly unethical.  However, professors at most institutions are given a huge amount of latitude in making decisions of this kind.  That latitude is intended as deference to the professor as the one closest to the situation and a recognized scholar in the field, etc, etc.  It's not intended to extend to capricious or unethical behavior, but I'm sure your case is, sadly, neither the only one nor the most egregious.

As the professor has already departed academia (and good riddance!), there's not much to be done about that particular individual.  In a few years, though, you will likely be getting contacted by your alma mater frequently as they are very interested in what you would like to contribute, etc.

There might be some opportunity here to ask to speak to someone who will be interested to know why you are unable to donate.  Until they have clear policies in place that prevent the kind of abuse you were subjected to, you can't see your way clear to making contributions to an institution that, through their own negligence, damaged your career while it was in at its most vulnerable point.  Obviously there's no guarantee you will get through to someone who will listen, but it's worth a shot--if they do, it might prevent someone else from going through what you went through.

To anyone else going through this, get everything in writing.  "Why are you withholding your signature?"  Get a paper trail, or it's your word against the infinitely more powerful professor's as to what is going on.