If the 60 year old foam is turning to dust, I would think the customer would normally be consulted regarding rotten foam. However, here in Mexico local customs may be diferent.
I think that would be the right thing to do, absolutely.
But considering a new cover from Legendary would be well over $300, and the seat foam material would be another $80, just having a cover made for $125 seems like a steal. Now I know pricing is different in Mexico too, but it seems to me like you paid for a new cover and install and not a rebuild. They probably should have confirmed that when they had the seat apart though. It does seem pretty clear in that first picture that the foam is pretty rough, so maybe they figured you already knew?