I read through Ron Conte's blog post and find it sloppy and unscholarly. He makes the (correct) point that Fr. Z's proposed translation sounds literal and stinted and, almost in the same words, asks us to use his translation even though it makes no grammatical sense, because he has translated many things. It does not help that his proposed translation is just as awkward.
I will argue for the ablative gerund. I think there is one compelling justification for this in the oratorical structure of Bede's sentence. I will use line breaks to emphasize this:
Vidit ergo Jesus publicanum,
et quia miserando atque eligendo vidit,
ait illi, ‘Sequere me’.
The key second part answers the question: how did Jesus see the publican? The repetition of vidit with two ablatives answers this question. If Bede wanted to revisit the first part by describing "what kind of man" the publican was, it would not make sense to repeat vidit. If the intention is to modify publicanum, there is no amount of verbal prevarication and translation credentials that can justify the use of the ablative.
I should also add that any possible interpretation of these words as a dative gerundive and modifying illi ignores the rhetorical balance of the sentence, since the quia clause forms a distinct entity.
The ablative gerund with a verb is a frequent construction. Here is one easy example:
simul illorum calamitatem commemorando augere nolo quibus liberos coniugesque suas integras ab istius petulantia conservare non licitum est.(Cicero, In Verrem 1.1.14.12)
So, what are these two gerunds saying? Let's look at two similar usages of the ablative gerund in classical literature:
- Miserando
tu quidem, Cn. Corneli, macte uirtute esto; sed caue, frustra miserando exiguum tempus e manibus hostium euadendi absumas. (Livius, Ab Urbe Condita 37.17.7.4)
...be wary lest you waste the small time you have to escape from the hands of the enemy with pointless sorrowing.
- Eligendo
Nam adulans populus Romanus Octaviano tria obtulit nomina, utrum vellet Quirinus, an Caesar, an Augustus vocari. ille ne unum eligendo partem laederet quae aliud offerre cupiebat, diverso tempore omnibus usus est... (Maurus Servius Honoratus, In Vergilii Aeneidos Libros 1.292.26)
...lest he, by choosing one [name], should offend the part that wished to offer the other...
Enlightened by these examples, we can come up with a literal translation:
Jesus saw the publican,
and, because he saw him by means of his pitying and choosing,
he said to him, "Follow me."
A freer translation that still captures the ablative of means and assumes a kind of hendiadys:
Jesus saw the publican, but because he saw him in light of his merciful plan, he said to him, "Follow me."
I admit that the present participle (modifying "Jesus") seems more natural to me here, but Bede's point appears to be that "Jesus only saw him because of his great mercy and plans for that person"--as if he did not see him with his physical eyes.