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A car isn't going to blow up by being put in neutral. All even remotely modern cars have rev limiters. The car can bounce of the rev limiter a long, long time before any damage is done to the engine.
BMW and Mercedes used to test engines running them at redline for days at a time.
As far as turning the car off, on a normal key ignition, you of course can turn it off without locking the steering wheel.
(Not sure how these gimmicky push button systems work, but my strong hunch is if you simply push the button to turn off the car, the steering won't lock).
This CHP story is so odd, since there were any number of ways anyone with any knowledge of cars could have avoided the tragedy.
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