So the questions were designed when there was 150 units and not 500.
sorry, but that is not a valid excuse, even if ED had no solid number we've been knowing for months that there were around 500 (take or give 100) units in the limbo...
Not really - Craig has never really given exact numbers, and the "estimates" he occasionally gave on this board or on IRC were wildly fluctuating. As far as I recall, his most recent estimate (months before the survey) was "a few hundred", whatever that means. Meanwhile, ED has kept shipping units to Craig's pre-orderers, so the number should have gone down since that a lot. Of course knowing Craig, one could speculate that "a few hundred" doesn't mean 200 or 300 but rather 600 or so, but you cannot plan things based on wild speculation on how to interpret phrases like "a few hundred".
The only thing ED could work with were the numbers Craig gave him and the numbers he knew himself (number of units he shipped etc.). Based on ED's calculations, there should have been about 150 left in Craig's queue. Only recently has it become absolutely clear that this number is actually more than 3 times bigger.
As it turns out, Craig seems to have lied about his original queue size - or maybe he was just overly optimistic and bad at counting/bookkeeping, the lie was not necessarily intentional. Either way, given that Craig has essentially "left the scene" and doesn't seem to want to explain himself, we'll probably never know exactly what went wrong there. It is clear that Craig has (intentionally or not, I can't tell) given ED false information at several crucial points in time in the story of the Pandora. The initial misinformation was that the Pandora was in fact ready to ship in 2008, which was of course not true at all. ED probably wouldn't even have joined the project if not for this lie by Craig. When ED made his plans to shift production to Germany, these plans were again based on false information by Craig.
The only really fair solution would be that Craig somehow finds money to pay the production cost for the units he still owes his pre-orderers. In my opinion, that would still be the best option. But to be honest, I don't see where Craig would find that money anytime soon: maybe profits from iCP2 sales could be used for this, but I doubt the initial KickStarter sales are going have any significant profits (given all the delays and issues, he'll probably be happy with a break-even) so it will probably take a lot of time before there are enough profits to pay for all those Pandora units. And that is assuming Craig wants to use profits from his iCP2 company to fix his Pandora company - he is not obliged to do that, he can also just let his Pandora company die a slow and agonizing death (or declare bankruptcy). As far as I can tell, he is no longer interested in his Pandora customers or at least not willing to spend more time and money on them. That may seem cold-hearted of him, but I can understand it: the entire thing must have been a very frustrating experience, he has lost a lot of money over this (much more than any pre-orderer or maybe even more than all the remaining pre-orderers together), and his reputation went from "saint" to "satan". So I understand why he wants to have nothing to do anymore with the entire thing - yes, he is "abandoning" his customers, but in a sense he is a victim too. Some of it is certainly his own fault, but not all of it.
So anyway, given that that "actual fair solution" is not going to happen, I think ED's proposal is a good idea. If you're in Craig's queue, you can still wait for some miracle (Craig making lots of money with iCP2 and finally able to buy those units, some huge mystery donation to the pre-order fund, or maybe a Pandora successor happens in a few years and becomes such a big success that ED has so much spare money that he offers free units to Craig's old customers), or you can make use of ED's very generous discount.
In my opinion, the important thing here is that ED should be able to finally stop having to think about how to clean up the past (Craig's mess), so he can think about the future and his own stuff: paying back his debts and investors, designing a Pandora successor, maybe being able to drop the prices a bit in his shop, and so on.