Personally, whenever I've made wedding dresses, I do the hem as the final fit, with shoes. I always allow at least an extra 5cm beyond floor length for the hem (and I usually ask a rough guide of heel height when making the toile). However, that is just what I do.
The way I see it, you have 3 options:
Take them to small claims court to get back your money (which will incur cost, hassle and no guarantees you will actually get your money back) for failure to fulfil contract
Pay for the dress, get the width sorted (although as mentioned previously, the stitch mark could still show) and wear flatter shoes
Or (and I'm just putting this out there as a possible solution) ask them to provide some extra fabric, which could be sewn to the lining making look like a 2 layered skirt (and do this all the way round), but it will depend on how short it is.
Personally, I think the tip of your shoe should be showing as a wholly full-length skirt (ie completely to the floor) is extremely difficult to walk in and it will cause you problems in getting around. It's not quite clear to me how much of your shoe is showing.