He was given a nine-month suspended sentence, and banned from driving for life, after admitting a charge of causing death by careless driving at an earlier hearing.
Judge Keith Cutler said: "If there is any message that should come from this it should be that the elderly and those that care for them - their families and doctors - should think very, very carefully about whether the elderly should still be able to drive on the road.
"There is sometimes a form of arrogance that one can carry on exercising a right to drive when that should not be done."
The court heard that Waddell had been driving his wife from their home in Andover Down to a music concert at the time of the crash in March last year.
He had apparently taken a wrong turning to end up travelling west on the eastbound carriageway, and ignored other drivers flashing light and honking their horns at him - flashing his own lights at them and going through "no entry" signs.
Mr Colquhoun was not speeding and was legally overtaking another vehicle as Waddell came round the corner.
Neither driver had time to react, causing the cars to crash and spin around followed by a secondary collision involving Mr Colquhoun's car.
Waddell and his 89-year-old wife were pulled from their own vehicle by other motorists but they were unable to reach the younger man as his car was engulfed by flames.
When interviewed by police, his recollection of the drive leading up to the crash was "hazy" though he said he was "fine to drive" and did it most days.
Tests showed that he could see no more than hand movement in his left eye while vision in his right eye was slightly less than the legal standard.
Daniel Sawyer, prosecuting, said: "Undoubtedly, with his vision, he should not have been driving. It's fair to say the doctors who saw him did not tell him not to drive because they did not realise he was still driving."
After the crash, Waddell was found to be suffering from bleeding on the brain, as well as memory loss and confusion and "early signs of dementia".
Charles Gabb, defending, said: "For a man who has dedicated his life to saving the lives of others, to be instrumental in the taking of one is a shattering blow for him."
Waddell has since moved to Porthcawl in south Wales to be near his wife in her "dying days".
Mr Colquhoun's mother Patricia said: "Though I acknowledge that there are many safe elderly drivers on our roads there are some who are not, and families are sometimes too afraid to confront their elderly relatives as to their failing abilities."