They should have gone with the final option, knowing what of a state the game was in. You aren't punishing anyone, because the consumer had always known the release date.
First option?
And I see where you're coming from, but what if its an impulse buy? You go into a store, browse around, and see Elemental, which looks interesting, and figure you'd give it a go. There's no telling how many people would be like that, but they would probably all be rather annoyed with impulse, and hold it against them if they bought a game but couldn't play it. And then the press would jump on the story like they have here, just portraying it from the other side, that people who legally bought games can't play them, and so on. There's no winning move.