Actually, they are.
At least that's what their communications with me after they offered to pay to have it shipped back to China indicated.
Yes, they offered to pay for the return. Up front. Along with the refund.
They also pulled all the listings for that model after I contacted them. They are back now. As noted, my box was marked 4GB, but the player inside the sealed original box was marked 2GB. I guess they could open every one, but that seems like it would generate more issues than it solves.
And, yes, dealers are charging that much for the miniXD option. Here's a model that is identical to the one in question with exactly that markup:
http://www.mp4nation.com/products/index.php?PID=mp8276
So yes, I took that as somewhat of a common charge. Going from 2 to 4 GB on a site like UXcell costs 15-18 dollars a pop. And that's for a chip on the board. Not a removable card.
My opinion, of course. ;-)