Ugly indeed. At least, in this case, the readers received a refund. But it still leaves a bad taste behind.
What is depressing from this incident, is that it is another example where the copyright holders believe that they have unlimited rights and the consumer has NO rights. Therefore, with impunity, the copyright holder is "entitled" to do anything, at any time, and for whatever reason. I guess this is another case of Orwell's "We are all equal, but some are more equal that others."
Fortunately, George Orwell is out of copyright in Australia and freely available on the web at http://ebooks.adelaide.edu.au/o/orwell/george/ .
The two lessons here: buy an e-book that does not maintain rights to steal your content, never pay for content you don't end up controlling.
Electrons are ephemeral...books can last forever.