I think this should be the normal way of doing things. I cringe when I hear about people renewing domain names after they expired. I think the records should be changed prior to the domains expiring so they could hard-expire X years after being registered and people would know exactly when they really need to renew them.
But, of course, since it's not in their TOS, and isn't either the normal way of doing things or stated very loud and clear during the registering process, it's unacceptable.