The thing that sticks in my craw about this situation is that it demonstrates that the university needs the student's money (and potential donations after graduation) more than the university needs to educate a student. It also teaches the student that if you whine enough you get what you want.

Out of curiosity's sake, was the instructor adjunct faculty? I've been told by friends who are professors that the adjunct faculty are forced to operate under a different set of rules than the regular faculty.