Yeah, that's totally lame. What a bunch cry-babies! So what that you picked up a few extra magic items? What's even lamer is that he took them back because of the cry-babies.
I have played with guys who weren't very good at 'winging it'. They don't really have anything prepared, but think they can handle flying by the seat of their pants for a session or two. They then run into problems because they lack a good foundation in the rules or can't see how far fetched things are getting.
This one did seem to be planning on screwing everyone over, which makes it that much worse. He could have at least made a short power scenario in which the PC's become super powerful and ride off into the sunset or at least die valiantly changing the world for the better.
Seriously. If he was bored with a setting he could have shaken things up or ended it on a high note. Who uses a TPK because they're bored? I would think anybody could say such a choice wouldn't go over well. Either he didn't care about DM'ing that much or the guy was seriously dense.