Time to edit videos is a cost. The labor to edit is a cost. Equipment is a cost. Electricity is a cost. Editing software is a cost. Rendering videos costs the use of the machine for awhile. Lost opportunity doing anything else with his time is a cost.
While his videos remain unpublished, his competitors see views. His audience goes elsewhere. His videos become irrelevant if left unpublished for so long. Videos don't magically edit themselves. And yes, they were asking him to sacrifice his revenue, time, and labor to fix their mistake.
Did they have an agreement to cover this kind of situation? Anything in writing that would describe what either side is responsible for? This is why DETAILED contracts are important.
Guess it'll all come out in court.