I'm sure offloading specific bags during a snow and ice storm isn't easy and the weather undoubtedly played a role in the time it took to offload those bags. The OP will never know just what the "security issue" was nor does he have a right to know that information. As far as I know APIS (Advanced Passenger Information) is only transmitted to the destination country after all passengers are checked-in with documents verified. The final verification of those documents takes place just prior to boarding at the gate. There must have been something about those passengers that raised a red flag after their passport and other identifying information was transmitted to Zurich. If it were me I would much rather they remove those passengers and their bags and sort things out prior to the plane departing.
As for the pilot's announcement of the 3 hour rule and the return to gate to "stretch our legs" I think it might have been a jab at the passengers which is not aceptable. The new rules were just released by the DOT yesterday and I believe the airlines have 90 days to be in compliance. It seems to me that citing the new DOT rules, even if the pilot had knowledge of them, was jumping the gun a bit. Sort of a "well, you spoke and the government listened so this is now the way things are going to be..." kind of thing.
I believe cortney is correct in assuming the weather may have worsened causing the cancellation. After a certain point the airport may not have had the manpower to effectively keep up with snow removal and/or the airline's ramp employees responsible for de-icing hit their maximum time allowed to work. Also the flight crew may have timed out. If the OP cares to write a letter to Continental they should be able to tell him the exact reason for the cancellation however the root cause will be weather. The OP will get a refund of the airfare. As for the other pre-paid expenses hopefully there was some travel insurance purchased to cover those.
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