Thanks for various supportive comments 
The reasons my wife was turned down are many! First of all, the form was ridiculously difficult to understand (we initially thought of getting an immigration lawyer to do it, but we were quoted about £1000, so thought we'd have a stab at it ourselves). 80-odd pages is mad and far more complex than other EU countries (as well as costing £65 a pop).
Other issues were that we submiitted bank statements as proof of long-term residence, but they were joint account statements (we're such a touchingly trusting pair that they are all we have), which they didn't like. My wife retired after cancer treatment in 2011 and we sent her last 6 month's payslips as proof of income at the time. They took this to mean that she'd only worked for 6 months (and was presumably sponging off the state for 28 years previously)!
Also, as we had been running our own company for 28 years (but were employees, paid PAYE etc. by the company, just like all the other employees), they decided that we were in fact self-employed and as such weren't allowed to stop working until the state retirement age.
The whole thing (and other stuff too long to go into) was a Kafkaesque nightmare and there are no contact details on the rejection letter to enable you to explain the situation to a real human being. They had out stuff for just under 6 months, then gave us 14 days from the date of decision to appeal. It took me almost that long to make head and tail of the grounds for rejection.
We've now had another go, with several kilos-worth of documentary evidence (took ages to get hold of and collate, but what else can you do?); oh, and another £65 plus £36 for using the Passport Exchange office to avoid having to surrender her passport for however long the HO takes, so will now have to sit it out until the HO gets round to looking at it (up to 6 months, we're told).
I'm sure there are others with far worse experiences, but we've decided that if we get a second rejection, we're off back to Germany (leaving ds and 40-years' worth of friends behind). Thank goodness for the 3 million, who keep us in touch and stick up for our interests.
So when people tell us they didn't mean us, forgive us for not smiling and saying thank you.