They didn't pay $500 to buy them. They paid $500 for a time-limited rental. You can argue that the price was too steep for a loan, or that Apple should be offering a more generous incentive to return the hardware. I wouldn't disagree. [2] But it's not like Apple was unclear about this.[0][1]
[2] To everyone who dealt with faulty hardware, I think Apple should be quietly offering refunds, not just a partial store credit. But to everyone else, they received the service promised by Apple in full and should be stoked at the $200 return incentive.
Developers paid $500 to use the DTK for a few months.
Is Apple giving them back $200 or $700?
$200
Apple is now saying 'you are contractually obligated to ship back this DTK and when we receive it you will receive $200 store credit to buy a new M1 Mac which expires on May 31 if unused.'