I don't know why you expected them to send you a new mailing envelope. That's never ever happened, ever.
Even if the plastic poly bag is ripped, slap some tape on it and send that shit back to them. If that's how they want to ship it to you, then that's how they should receive it back. Recently I received a book absolutely manged in one of those poly bags. I didn't even open the bag because I could see the book was destroyed from the huge rips in the bag. Hastings asked me to send it back to them. I laughed and even mused in this thread that I should send it back to them in a sandwich bag. In the end I just stuck the still technically unopened package in a padded envelope I saved from another purchase from them. So I guess the moral of the story is try to save some padded envelopes or be prepared to tape back up a poly bag and send things back that way.
Them even offering to let you order the product at the current price then refund you the difference of what you paid was already a huge YMMV. The vast majority of customers never get that option. It's not company policy to offer that and quite frankly I'm surprised it was offered to you. The usual policy is to ask for you to send it back if it was worth over $5, and then they'll fully refund you when it is returned to them. If you still want the item you can pay whatever the new market price is, no difference in price refund offered. So you shouldn't be annoyed at what they offered you - yes its an ass backward order management system they have, but you actually got a better than usual result out of it.
It also shouldn't be surprising that they didn't give you the other customer's information to pass on the game to them. It's none of your business to complete their transaction, or to try and fix their screw up. No (sane) retailer would give you another customer's information.
Furthermore, if you spent an hour on the phone with CS, you're doing it wrong. I have no idea what in that conversation could have taken you an hour unless you were sitting on hold for 45 minutes.
Otherwise, welcome to the club. Things with Hastings either go great or they go really wrong.
Because speaking of which, I got a giant padded mailer today with some LEGO sets in them. They were the cardboard box LEGO sets. The prices were so cheap I thought they'd make great gifts for the holiday charity collection at the local fire station. (It used to be Toys for Tots but they've got it named something else now.) Instead of grabbing a box, some dimwitted associate shoved three sets into a padded mailer and shipped it out like that. The end result? One box was beat to shit because padded mailers don't provide protection when they're overstuffed and the item is somewhat fragile like the thin cardboard boxes LEGOs come in. I think the fire station will accept the toy despite the mangled box, but if these were for collecting purposes or something, I'd tell Hastings to shove that set back up their ass and refund me the money because they were too cheap and too stupid to spring for a cardboard box.