The issue is obscured by the notation / formulation that Wen uses. Fundamentally, your spin transformation must look like something of the form
$$
\begin{pmatrix}
f_\uparrow \\
f_\downarrow^\dagger
\end{pmatrix} \mapsto U \begin{pmatrix}
f_\uparrow \\
f_\downarrow^\dagger
\end{pmatrix} \hspace{2em} (1)
$$
for an appropriately chosen unitary $U$. (It must be unitary to preserve fermion normalisation).
Left-multiplying $\Psi$ by $U$ implements exactly this for its left column, but not the right. Instead, it performs
$$
\begin{pmatrix}
f_\downarrow \\
-f_\uparrow^\dagger
\end{pmatrix} \mapsto U \begin{pmatrix}
f_\downarrow \\
-f_\uparrow^\dagger
\end{pmatrix} \hspace{2em} (2)
$$
whereas appropriate manipulations of (1) would instead suggest the transformation law
$$
\begin{pmatrix}
f_\downarrow \\
-f_\uparrow^\dagger
\end{pmatrix} \mapsto RU^*R^{-1} \begin{pmatrix}
f_\downarrow \\
-f_\uparrow^\dagger
\end{pmatrix} \hspace{2em} (3)
$$
where $R = \begin{pmatrix}&1\\-1&\end{pmatrix}$.
Now a generic $U(2)$ matrix can be written as
$$
U = \begin{pmatrix} a & b \\ -e^{i\theta}b^* & e^{i\theta} b^*\end{pmatrix}
$$
for $a,b\in\mathbb{C},\ \theta\in\mathbb{R}$, $|a|^2 + |b|^2 = 1$.
It is then a quick calculation to show that the condition $RU^*R^{-1} = U$ is exactly equivalent to $\theta=0$, i.e., the condition $\det U = 1$.
TL;DR
It is a special property of only $SU(2)$ matrices that rotations of the fermion pair can be represented as left multiplication of a matrix, using $U(2)$ matrices here does something that breaks fundamental commutation relations.
However, it is also true that in principle one could have used a $U(2)$ matrix for equation (1). This preserves canonical commutators perfectly well - as Lie algebras, $\mathfrak{u}(2) \simeq \mathfrak{u}(1)\times \mathfrak{su}(2)$, with the Abelian part factoring out (indeed this ultimately ends up being a trivial phase for, e.g., the $f_{\uparrow}$'s). Note that as groups though, $U(1)\times SU(2)$ is a double cover of $U(2)$.