If you think you are right, please take the matter to court. You will find, like pmorici already has, that your interpretation is FOS and won't hold water. 
I don't need to take it to court because I haven't invested in this failure. It was clear from the moment that they promised full BTC refunds that something is fishy.
Now the real question is who burned more money? BFL or HashFail? Who do you think wins here?