On the face of it I'd have to agree that this seems unethical at least for a ct and I'm sure professionals wouldn't be happy either but would understand that "it's business."

As a director I'd be leery of actors putting provisos on their acceptance of a role beyond the normal scheduling conflicts.

I don't want to entirely trash the director or his action because there may be other circumstances in play other than those given.  I'm in no way suggesting in the least that moetbubbles nephew is responsible for his own un-casting.  Just that the director may have felt that his options were limited.

Personally I would not have agreed to the replacement actor's terms and would have continued looking.   Maybe that comes from being located in an area where the talent is relatively bountifull and finding replacement actors although unpleasant and time consuming doesn't become a "hostage situation."

I agree with the "having a spine" and "blackmailed" comments made by castMe.  The best way to handle a "bully" is to stand up to him....more often than not he will crumble.  This has happened to me twice.  During "Assassins" we had a terrible time with music directors:  one quit because she felt the cast was harrassing her (not), one had to have emergency surgery, one because he wasn't up to the Sondheim score, etc., etc.  Finally with only two weeks to go we had to hire a professional conductor/pianist/vocal director from a nearby city to the tune of $1000.  His one proviso was that he could "fire" anyone he felt was not up to the task.  I told him that was not an option and that we would find someone else if that was not negotiable.  He stayed.  Another time a cast member in "Charlie Brown" told me (long after the time to list "rehearsal conflicts" had gone by) that he wouldn't be at final tech/dress rehearsal as he had tickets to "The Who" concert, and he "could do this show anytime".  He went to The Who concert despite a last minute change of heart on his priorities, and we got another Schroeder, a much better one at that.

Show your cojones!  Down with bullies!