first, how do you know it was pointed out to him? did you point it out?
second, how would you know if he got the message that it wasn't what it was and just took it as someone trying to scam him? i know if i got something that i was selling and someone told me it was a cheaper thing i would not just say "oh, your right....i'll just change that and....here your go, 1/3 of the price." most people would try that just to get a "great deal" on a fish.
i wasn't saying that it is justified to pass it on. what i said was he may have not known at first. yes it is shady if he was informed about it and didn't change it, but how often does your lfs change things or other vendors after the id is fixed, not often. i am not defending him persay, but more or less putting him in with other venders/lfs that cant afford to take a hit.
as for the suppliers it all comes down to a percent. if he only has 5% or so of their dealings they may just tell him to get bent. he would then have to continue to do deals with those suppliers because there isn't many left.