Since no one else has had much luck with this question, I'm going to suggest a word that initially struck me as being a very unlikely candidate: decommission. In normal use, decommission has a single, specific meaning that isn't at all similar to spiking, scuttling, scuppering, and the like. From Merriam-Webster's Eleventh Collegiate Dictionary (2013):
decommission vt (1922) : to remove (as a ship or nuclear power plant) from active service
Merriam-Webster Online offers the same rather narrow reading of decommission. Now consider the three definitions and four examples for decommission that appear on Wiktionary:
decommission (third-person singular simple present decommissions, present participle decommissioning, simple past and past participle decommissioned)
- To take out of service or to render unusable.
[Example:] They decommissioned the ship after the accident.
[Example:] The Army decommissioned the Sherman tank by filling the turret with cement.
- To remove or revoke a commission.
[Example:] After his arrest, the officer was decommissioned from the police force.
- To remove or revoke a formal designation.
[Example:] The state highway was decommissioned and reverted to local control.
The first Wiktionary definition of decommission explicitly extends to instances where the operators of a piece of equipment intentionally render it unusable, and the second example of the relevant usage refers to disabling a military tank by plugging its turret with cement.
It seems just possible that someone in the military might have come up with the idea of equating rendering a piece of military equipment unusable with formally taking it out of service and mothballing it—an ironic equivalence, but not an unimaginable one—and the usage caught on.
UPDATE (12/10/2014): I just found a copy of US Army Field Manual 003-090 Operations: Tactics (July 2001) online. It uses the term denial operations to describe what the OP seems to have in mind. Here is (part of) the manual's discussion of denial in a section titled "Unique Retrograde Situations":
11-110. Denial operations are actions to hinder or deny the enemy the use of space, personnel, supplies, or facilities. It may include destroying removing, and contaminating those supplies and facilities or erecting obstacles. It is inevitable that, on occasion, an enemy will be in a position to capture friendly equipment and supplies. This situation often occurs during retrograde or defensive operations. As a result, the defending commander may be required to conduct denial operations. The principles of denial are:
The commander should deny his enemy the use of military equipment and supplies.
Steps taken to deny equipment and supplies to the enemy should, if possible, not preclude their later use by friendly forces.
The commander orders the destruction of military equipment and supplies only when friendly forces cannot prevent them from falling into enemy hands.
The user is responsible for denying the enemy the use of its military equipment and supplies by means of its destruction, removal, or contamination.
Deliberately destroying medical equipment and supplies and making food and water unfit for consumption is unlawful under the terms of the Geneva Conventions.
In denial operations, the definition of a unit’s military equipment and supplies could expand to include military installations and any civilian equipment and supplies used by the friendly force. Under the law of war the destruction of civilian property is only permitted where required by immediate military necessity. The determination of whether there is sufficient necessity to justify destruction is a complex analysis that requires consideration of moral, political,and legal considerations.
11-111.The commander who orders the denial operation must consider the potential value of the military equipment and supplies to an enemy when determining the priorities and the extent of the denial operation. Examples of high priorities for denial include—
Classified equipment, material, and documents.
POL ["Petroleum Oil & Lubricants," presumably].
Sophisticated weapon systems or electronic equipment.
Heavy weapons and associated ammunition.
Ferrying and bridging equipment.
Air, sea, and land transport systems.
Of lesser priority for denial would be any other military supplies, equipment, or facilities that may be of use to an enemy.
11-112.The commander must issue detailed instructions to deny military equipment and supplies to prevent the enemy from directly using such assets. Denial must also prevent an enemy from repairing a system through the cannibalization of several systems. The unit must destroy the same parts in each type of system.
Given that this manual was published in 2001, it may well have been in force during the middle to late stages of the retired lieutenant colonel's military career, and the term he is looking for may be either denial or denial operations. It seems to me that denial as used in this manual is by no means identical to a "scorched-earth" policy. Indeed, section 11-117 of the manual refers to the possibility of "Limited or partial denial operations":
11-117. Limited or partial denial operations are particularly suitable if the defending force expects to regain control of the geographical area within a short time. The removal or destruction of only a few key components can reduce a facility to limited utility, yet it allows for the facility’s quick restoration of all functions once it is returned to friendly control. American forces only destroy discrete targets of significant military value. Limited denial operations normally do not affect the advance of properly supported enemy combat formations possessing cross-country mobility. However, they can seriously impede an enemy’s road-bound and rail-bound logistics support if executed with skill and imagination according to an overall plan.
In contrast, it's hard to imagine a "limited scorched-earth operation."