That doesn’t bother me, and it’s completely tacky to criticize something you are given for free or for cheap. By having that rule, it avoids awkward scenarios like that. I think it’s classy of Pete.
And I completely, 100% agree with Sean about booking airfare first. Airfare to Hawaii from here has sales fairly regularly, and can dip hundreds of dollars a ticket, but the dates are unpredictable. Last month it dipped to $350 RT. That savings over a family could easily cover an upgraded view type or an excursion.