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I'm going to come out and suggest that he had the right to offer to sell it back.
He discovered an apparent slip-up on their part, and asked for compensation in exchange for helping them fix their mistake. I don't see a problem with that.
He didn't have to return the drive to the police. He bought it, and all associated rights to it from the salavage company (goodwill). That means the data is now his. The company abdicated it's right to the data by failing to erase the drive before selling it.
If I bought a used car, and found a bag with $100,000 under the floorboards, the previous owner has no claim to that money.
No obviously I am not speaking about this from an ethical standpoint, simply a legal one.
The charge of extortion is the company's reaction to being embarrased.
I wonder if the company has notified their customers that their personal data was breached, or that the company was at fault?
I don't see it happening. The company would rather spend a million on a lawyer against this guy for "Extortion" than $1.25 to fax out an apology.
So in sum, what was wrong with paying $3500 to fix a screw-up on their part?
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Seen on an employer evaluation:
"The wheel is turning but the hamsters dead"
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Is arch13 really a porn diety ? find out after the film at 11.
-Nanofever
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