Unless they have the protection plan, that's how it works.So Dish will take the 301 that they own & give them a leased one?
I should note that it might not be an option to lease if the programming package(s) don't qualify. In that case, they would have to buy a 311 and properly dispose of the 301.
To buy a new 311 outright costs about $70 (or a reman for a few dollars less). Used machines are available but I'm not sure you want to risk repeating this act.