You're right in thinking what they did was illegal and I'm glad you've followed it up with Fair Trading.
The surcharging laws say that businesses can only charge a surcharge to recover the costs of processing the transaction - they can't make a profit from surcharging. This cost is reflected as a percentage of the transaction processed. Therefore, if your friend's transaction went through, the bank would charge a percentage-based fee on their amount which the restaurant have passed on the the customer. This obviously isn't the case if you're paying cash, as there is no need to recoup costs from the bank.
You're right in saying that the principle of it is important! Imagine if they're doing this all the time - the $ figure dramatically increases. It's also a new law, so it's important for businesses to understand and comply with the law from the start. This also applies to fixed cost surcharges commonly seen at cafes (e.g. 50c charge for card transactions). The fee needs to represent a percentage of the total cost, not an arbitrary dollar amount (unless it's capped below the actual 'cost of acceptance', like some airline booking fees are).
Tilly - Policy and Campaigns Advisor