@soaringeagle: these are excellent points. Half of mastitis cases usually resolve on their own without antibiotics, so it's not an entirely "wrong" strategy to wait it out and see what happens. But, in the meantime, cows are in pain and that's not good.
As far as lameness goes, cows are less lame on pasture, slightly more lame in a freestall, and definitely more lame in a tiestall (can't expect much else when you don't move around). However, the research is very clear on one point: the biggest problem with lameness is that farmers don't recognize it. So, only the severe cases get noticed and treated. Farms with "little lameness" often have a much bigger problem with milder cases that simply go unnoticed. I am not insinuating that this is the case on the farm your wife worked at. I am just pointing out that pasturing doesn't eliminate lameness, if you have other causes on your farm. Pasturing provides exercise, but it can't really undo the ill-effects of a poorly designed barn. This is especially important to consider in northern climates where organic cattle spend much more time inside in the winter.
Furthermore, one British study found that 37% of organic cows had hock lesions - anything from a scruff mark to full-on bulging inflammation on their "knee" joints. I think an industry who uses animal welfare as a huge selling point can do much better than having over a third of their cows walk on abraded/uncomfortable/injured joints.
That's interesting about your wife reacting differently to conventional and organic milk. It's not the first time I have heard about it though. Maybe if I get enough upvotes on my writing I can do a PhD on the subject ;)