EdStainless gets my star. The issue isn't the use of the fire extinguisher so much as the welding- nobody should even attempt to make weld attachments, much less welded connections, to anything intended to contain compressed gas! That said, the 3 gallon fire extinguisher (or air receiver) falls under an exemption to our local pressure vessel code and would NOT be considered an ASME vessel.
If the off-roader had used the original threaded connection and clamped rather than welded the "vessel" to his vehicle, his risk would be greatly minimized. As Ed says, using a fire extinguisher designed for 275 psig to contain air at ~ 100 psig isn't the stupidest thing people do on a daily basis. Personally, I'd feel safer with a good quality fire extinguisher shell in my garage than I would with one of the flimsy non-branded Chinese hobbyist pancake compressors! The brand-name people are making them in China too, but they're worried about product liability a little more than the non-branded Chinese factories are, for sure, and it shows in the construction of the tanks.
Good comments about the weld attachments for mounting compressors- definitely an accident waiting to happen if done improperly, and also widely (and poorly) done. Especially on those cheap non-branded units!
I think we'll be seeing a lot of these hobbyist units blowing up in about ten to twenty years. Typical scenario would be an explosion when somebody re-starts one of these units to fill a tire after the tank has been sitting in their garage for ten years, undrained and silently rotting from the inside out...