His grandfather was, so he has Jewish ancestry, which is enough for people in some parts of the world to consider him Jewish. (Even though he may not be Jewish in the eyes of the actual religion, it's not relevant.)
Do you really understand how preposterous the whole construction is? He is a Dutch citizen, with a Dutch passport, and a Dutch name. So, because he has a grandfather who is a Jew, that's supposedly a reason to deny him entry (according to the comment above, anyway) because it's presumably suspicious that he was in an area of the world that's unfriendly to Jews, even though nobody there has reason to believe that he's one. So, from that they construe some sort of reasoning that he could be a crypto-fundamentalist Muslim, apparently.
In reality, he doesn't think of himself as a Jew nor does anybody else, except the jokers that the US federal government apparently hires for these kinds of jobs (and that only after him volunteering that information), so there's no reason for him to have any fears that he might be exposed to antisemitic reactions. How would a hypothetical al Qaeda agent even learn that he has a Jewish grandfather?
Somebody's trying really hard to find a justification for stupid behavior by US agents that doesn't meet any evidentiary standards other than cover-your-ass paranoia.
