I was going to say oppurtunity rather than problem, especially as you are planning on going full-time pro, but judging from the email exchange it may be beyond that now.
Yes, you are right, and claimed ignorance on their part doesnt excuse them. But, a more constructive approach may have been to use it as an oppurtunity to develop a business relationship - in effect a one sale loss-leader.
They clearly liked the image enough to use it and spend some time manipulating it, so you and they know your work fits their requirements. Something along the lines of 'I'm really pleased that you used my image in your publication. As I'm sure you realise, copyright remains with the photgrapher unless specifically released, but I am more than happy to support this event with my work in this instance. As a professional photographer, I am looking for new clients in xyz field. If you have any further need to use the image, or would like to discuss other image requirements, please contact me via my website or by phone'
This might have landed you a new client rather than an annoying argument.
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