I really don't understand how you could have been confused. It's pretty clear that as a 14th level druid you can only shape change up to large, whether that be normal or dire. And it's pretty clear that a dire shark is Huge, thus excluding that from the list of things you can shape into.
Going by your method of thinking, once you are able to change into a black bear (medium) sized, you should also be able to change into a polar bear (large size) becasue they are both species of bear.
I have to agree with your DM as well.