Things were indeed pretty chaotic. I can't remember if they did print paper boarding passes in the end.
> it seems like the small fraction of people using a paper boarding pass can't be adding much extra cost
You're looking at this from the wrong angle: This is Ryanair. Actual cost does not matter, only the opportunity to extract more revenue. Presumably app users are that much more valuable to Ryanair (as they can be upsold various things there, and potentially because it also acts as a filter for a generally less profitable customer segment).