The above statement is one a company that cares about their reputation would never make to the end customer. Seeing as how they said that to you it shows me they could care not care less about their customers.
As someone that runs a custom business myself I can tell you that you never, ever tell a customer they are wrong, or try to shift the blame onto the customer. That's a sure fire way to give your company a bad reputation. I've had a few customers in the past (actually one of them right now) that were actually wrong about something, yet I never let that comes through to the discussions I have with them. And in your case you are not at fault to begin with so they are way out of line by saying that to you.
If it were my company the way I would have handled it is to send call tag for the item, which a call tag is one you just stick on the box and leave on the porch and UPS will send a driver to pick it up. Then I would have sent the proper item with no upcharge. That way you get what you wanted at the price of the first item, and don't have to go out of your way to return the other.
That would be what I would consider customer service. And that would ensure that you would speak highly of the company to other potential customers. Sounds like the person/people running said company is not very business minded if you ask me.