Not defending vendors, but from the description the OP gave the vendor was in every right to sell the item, it sounds like they had picked up the item,examined it, and asked the guy in front of him about it but before the guy could even respond, it was sold to someone else. OP, had you even offered the guy for it, or did you just show interest? How do you know that the guy who bought it hadn't already looked at it, agreed to the price, before you even picked it up? If you had made an offer on it, the guy in front of you accepted it, but then suddenly said it was sold to someone else, I could understand it, but it sounds to me like the item might have been sold before you even picked it up. Sounds to me like a timing issue or what we call a race issue in data flow, where the item was sold before there was time to take it off the table. If the guy only had 1 of those, then it goes to the person who agreed to buy it. If you had been haggling for a while and he didn't want to negotiate any more, he might have signalled his partner and they came over and said it was sold to end the haggling (why he couldn't just say "you are way under what I can sell it for" I don't know, but I have seen this tactic used), but in your description you had barely picked it up and was asking about it. FYI possession when it comes to a sale or a business transaction means where the two parties have agreed to the terms of the sale or whatever, at that point legal possession is with the buyer (unless there is some kind of agreement or rule,that is, where either side can break the transaction in a given time, the way you can back out from a car sale in NJ within 72 hours of completing the sale as a buyer, or entering other kinds of contracts like home improvements and the like,by law), possession in this case means nothing in terms of physically having it in your hands. If you take a car out for a test drive and the owner sells the car to someone else while you are out, the car is still his and he can sell it to whoever he wants *shrug*.
Honestly, the anger seems misplaced. First of all, the show doesn't have that much sway over the vendors, if they banned vendors because a customer wasn't happy, they would have few vendors after time, it isn't their fault if the vendor acted like a jerk in your opinion. More importantly, the anger seems misplaced for something that is a discretionary item, rather than a critical need, that it lasted as long as it has. It almost sounds like someone found an original 700e at a train show for 50 bucks in great condition that could sell for several thousand and lost out, rather than what sounds like a modern item that likely isn't all that rare. It happens all the time, you can lose an auction on fleabay, you can order an item from a dealer then find out it is out of stock, it happens, but to bear a grudge over it, not much sense IMO.