Maybe they should just cap the number of orders at the number of items they can make and ask anybody else to sign up on a list? Anybody who chooses option 1 is obviously evil?

100% this. If you can't deliver the product i want, then fine. Don't lie to me and deliver a product inferior to what i ordered for the same price without warning. That's straight up malice.

Naturally the kind of thing that would be defended on HN nonetheless