I have never heard of a store that limiting the number of fabric cuts (Size yes, fabrics no). If I spent the time picking out 10 bolts of fabric and they tell me they will only cut 6, I buy 0!
I would go talk to the owner. I agree with taking it back if you haven't cut it. If they don't give you a refund for the overcharge, demand a refund for all of it.
If you don't follow through on this, you will have bad feelings everytime you look at the fabric.
I agree with the others, he made a mistake and didn't want to admit to it.
I bet it gets fixed. Custumer service is what makes a business.