No, that's asinine. If the panel was not repairable, they should have replaced it. And there are precious few paint colors that present real colormatch issues these days (GM 800J "white diamond" is an abomination).
If they won't refund you, have your credit card company issue a chargeback or go to small claims court with pictures of the poor repair. Then find a real bodyshop; it's easy to find feedback on Yelp, Google Places, et cetera.
Don't be surprised if the bill to fix the poor repair is more than the original bill for their hackjob.