What they probably should have done is just reversed the transaction entirely, but if I was deciding this, barring some agreement on delivery time, Coinbase would be mostly blameless.
The reason for this is, they failed to deliver, that is not under debate. But they are assuming that someone who was long on BTC as a speculator, is still long on BTC.
In the latest edit Brian from coinbase mentioned that they are now honoring today's rate, which is a step in the right direction, and has subsequently save the OP substantial losses, but this does not absolve them of the original screw-up.
I doubt the OP will complain. If I were in his shoes I would personally request a complete reversal even if I wanted to buy at today's prices, and manually make a new request.
Any seasoned/experienced business would do this.
Example: If amazon fails to deliver/the shipped item is lost in transit, they reverse the credit card transaction and request you to re-order if you still want to purchase.
This sort of settlement process is a scary thing to throw very much money at.