I'm pretty sure everybody should understand that "instant setup" means "immediately after receiving the money". The IP issue is clearly your company's fault. Simply blacklisting a customer's IP for opening too many connections isn't good practice. So he's entitled to a refund for whatever portion of the month he couldn't access his VPS. Clearly, he hasn't handled this in the best possible way.
All that aside, this is not how you treat a customer (even a "rogue" one). If somebody defames your company, the only thing you should threaten with is taking it to court. Statements like
We informed the client of the fact that IF, he were to make false accusations we would disclose the case details for the public to review.
sound a lot like extortion. This is not what I'd expect from a professional service provider.
Whether what you did was legal or not (I know next to nothing about US laws), you certainly lost a few potential customers.