You acted perfectly (so did Roxy) as it's unfair for one dog to be on a lead and the other not on lead.
The other owner is not only biased but clearly has no knowledge of GSD's. If a GSD was NOT 'just playing' he would know about it. Sasha approached a lab on a lead this morning with a bit too much vigour (I was picking up her poo at the time) but I apologised to the owner, who got into a bit of a tangle in the lead, as it was my fault. No dog is perfect (except a GSD

) nor is the owner, dog owners should have a better understanding for others and not just themselves.