I am sorry your client is having trouble. Personally I don't like to discuss if Google is good or bad or if they are on a vendetta against SEO. I prefer to focus on problem solving and the current problem is why is your client not ranking and how to fix this. I am confused by a few things you mentioned.
His website offers the most competitive prices than any other site
If this is true why hasn't he reached out to the shopping deals/coupon site. The shopping deal websites have large communities that are always hunting for great deals and once they find it they normally link to it in their forums. These forums pass link power but more importantly can directly drive large volumes of traffic that converts making his less dependent on Google rankings.
Also when bloggers are talking about his specialty widgets why aren't they linking to him if his prices are so great? I would expect that he could gain some legitimate backlinks by informing bloggers & coupon sites about his great prices.
He offers products that nobody else sells
It is still easy to ranking #1 in Google if you are the only website mentioning a keyword. I am guessing no one else sells it but they mention it which is why he isn't ranking for these unique products.
Each product has its own description
I'd be interested to hear more about these descriptions. How long are they. What percentage of a product page is unique? If you have a 100kb product page and it only has 1kb of unique data, you have a problem. Also how is he checking to make sure he is using the same terminology that his users are typing into Google. Has he explored user generated content to boost up the amount of unique content on product pages & even if the UGC isn't good enough to publish it helps to show what keyword combinations visitors use to describe the product.
His youtube videos are embedded onto 2 competitors websites
Why not handle the videos himself so other people can't embed them? If his videos are on multiple sites then why should Google rank his site higher, since all the sites offer the same video content. I understand he made the videos but from a user experience POV, his website does not offer a better user experience if he allows his video content to be duplicated on other sites
All because he paid $60 to a seo company
Negative SEO does exist but $60 negative SEO I am not so sure. Does he not have many legitimate links (like blogger reviews, newspaper interviews, vendors & partners, or contests & promotions).
I am just wondering if his site is so great with the best prices, producing video content, plus custom descriptions from first hand experience why does he not have massive amounts of one way quality backlinks? If he didn't know that he needed to cultivate those links why isn't he doing that now?