I see nothing wrong with what he did.
He received a defective unit and was brushed off by the store. I would have raised all kinds of hell.
And THAT is why stores brush people off...
The OP clearly had his mind made up when the whole thing began and had a chip on his shoulder, this the rep who felt threatened.
From the way he told the story he had a superior attitude about the whole thing. That turns people off.
* A PRL upgrade CAN fix signal issues. I have seen that myself.
* Yes Shawn was an idiot, the dbm is the true indicator of signal strength not the bars and there seems to be a but in the Incredible OS build which inaccurately shows signal strength (specifically less bars than the actual signal). This has come up on several sites.
* As for the telephone reps, they have specific things they are expected to do before they can authorize a replacement device. If they don't do them they can get in trouble.
* Everyone complains about the cost of devices and the cost of our service but I read on BGR (and have seen similar statistics before) that something in the area of 95% of electronics returned as "defective" aren't.
* All of these returns/exchanges cost the carrier and manufacturer money which they then have to pass on to the consumer. I'm not saying that the OP's wasn't (it certainly seems that it was). But reps deal with people all day who are complaining about something and are well aware of the cost of returning devices which are not actually defective. They have to go through the same troubleshooting steps as the phone reps to ensure that the phones are indeed defective.
* If the OP's phone was right next to the display phone and the DBM was that different it definitely sounds like a defective phone to me (as long as both phones have the same PRL version, they should be talking to the same tower. It's my understanding all VZW stores have cel repeaters in them which is why the phones all look like they have near perfect signal.