Lo and behold, he knew what he was talking about:
Valid transfers from Community Transit, King County Metro Transit (Metro) and Pierce Transit are accepted on ST Express as a one-zone ST Express fare (Adult $1.50, Youth $1.00, Senior/Disabled* $0.50).
In retrospect, this actually simplifies things, since the different transit agencies have different fares. Nevertheless, this highlights the tradeoffs in having at least four different fare systems (and soon a fifth, RapidRide) in the three-county region. If the fare system is intricate enough to confuse someone like me, it’s too complicated; on the other hand, I woudn’t want tax-averse out-of-county voters forcing lower service levels on us in a combined Puget Sound super-agency.
On a different note, the driver also was enforcing “Pay as you enter” at the Rainier/I-90 stop outbound from Seattle. I suppose this is correct, but certainly isn’t SOP for most drivers on the 554. All in all, not a good day for me in terms of bus etiquette: today, I was the idiot without his fare ready.