If I were the intern in question, I would have withdrawn my application rather than proceed like that. I would never want to create an adversarial relation with a current or former employer unless they left me with no other alternative.
It would suck to lose a shot at a great job, but I think it's worth the loss to maintain a reputation as a loyal team player (even if the employer seems unworthy of loyalty) and move on to a more worthy employer when I can find a way to do so that won't raise their ire.
I would draw the line in situations where being a "team player" would require me to act unethically, but in the absence of something like that, I think that over the timeframe of a career, there is net value to being someone that former employers and coworkers recall positively rather than negatively.
It would suck to lose a shot at a great job, but I think it's worth the loss to maintain a reputation as a loyal team player (even if the employer seems unworthy of loyalty) and move on to a more worthy employer when I can find a way to do so that won't raise their ire.
I would draw the line in situations where being a "team player" would require me to act unethically, but in the absence of something like that, I think that over the timeframe of a career, there is net value to being someone that former employers and coworkers recall positively rather than negatively.