I don't think he should have asked for the $3,500. He was the one who designed the system, why should the government have to pay him for him to comply with a lawful order, which he supposedly didn't oppose (metadata for one specific user), simply because he made it difficult to do in that system (requiring custom coding)?

This is, IIRC, the exact point that the judge made - just because you made something difficult/impossible in the system, doesn't mean you get to ignore a lawful request / court order. It's not the government's fault that he designed the system to make it hard to do something, requiring extra coding.