I agree with what's been said here (and I'm jumping on very late, but the subject line made me stay away for a few days
).. This really needs to be blown open in vendor ratings. Frankly, telling people not to acclimate fish is dangerous and irresponsible. I'm pretty sure he was just lying in your case to prevent giving you any relief from the cost, but that's still blatant stupidity.
There was really a much simpler way for him to go about it, and that's to do what I do:
"Absolutely no guarantees on any marine life once you've paid for it and left the store with it, even if I chase you down the street and step on the bag and run back into the store." <grin>
You see this kind of thing far too often.. Slimy businessmen whipping up any story they can to absolve themselves of any responsibility. You wouldn't believe the horror stories I've heard from customers over the years.
FWIW, it's your responsibility to make sure the animal appears in good health before you buy it. With water like that, he could very well have looked normal (we all know how late it is by the time a fish exhibits symptoms), but the shock of bagging and tagging just threw him for a loop.. Not a whole lot you could have done.
Then again, there's also a measure of trust when you go to a business and expect that their holding facilities are at least borderline adequate. The nitrates don't really interest me (I've seen thriving display tanks with nitrates in excess of 600ppm - fish that are used to it don't seem to care), but to have ammonia that high is absolutely unforgivable, as it that pH.
Sorry to hear you lost the fish.
The sad reality of this hobby is that the guessing and testing on living creatures happens both on account of our own knowledge and experience, but also in our business dealings with shady dealers.
But hey, if you want to move to Vancouver you can have some free algae!