Initially my take was everyone involved got the short end of the stick in this deal. The importer, the dealer and double short for Ernie. Then a new twist to the issue struck me while following the discussion.
But before sharing my take on this, the importer has a valid position on gray market goods. Declining to deal with them is a tool that helps protect the importer's position in the market. An old one that is quickly becoming antiquated and untenable in a global economy, but a tool nonetheless. I would not fault them for using it judiciously.
In this case, Ernie apparently did everything right by not being assumptive, making arrangements in advance, etc. He even jumped through every hoop as instructed. Most of us who sell for a living appreciate customers of this ilk. So, the paperwork done the unit was delivered to the importer with an expectation that everything was OK and the upgrade would be done.
Here, in my book, is where things fell apart. At the last minute the importer discovered the unit hadn't passed through his warehouse which means he didn't make anything off its original sale. Unfortunately, and regardless of their policies, the importer had already made a commitment to do the upgrade. So, while he had every reason to be disappointed, the importer should have followed through and done the work.
If this led to a change whereby in the future the importer checked serial numbers BEFORE committing to do an upgrade, so be it. That would be acceptable in my book. Also, given the circumstances, if somehow the upgrade is not a profitable item, (which I doubt) then it would be reasonable to ask for the difference. Note that I said "ask", not "demand". A commitment was made and should have been delivered on. The whole end result reeks of a combination of poor business sense and sour grapes.
This is all sad to hear as I have been planning an upgrade to the digital source in my system. EC's DAC (at very least) was in the running. I'll certainly be looking elsewhere as how a vendor treats their customers is *very* important to me. The only thing worse than having a problem with a purchase is having it compounded by a short-sighted, inflexible vendor.