And then demanded £40 for the privelege, despite admitting the equipment they supplied was the issue.
You didn't try the phrase "Not of merchantable quality"?
When I was on Be their router stayed in its box, I had an existing ADSL router which I kept using. On moving to FTTC I switched to the PlusNet provided fibre modem and router. However they subsequently tied down the router which stopped me updating my DHCP settings, something I reckoned was none of their business so I've replaced both with my own fibre modem/router.
On the whole I prefer to buy my own H/W provided it's not the ISP's branded home hub type of box. It removes it from the ISPs control and makes it easier to switch ISP should that become necessary. It's rather like owning a domain for email; I might use an MSP to serve the domain but I can switch registrar and/or MSP if things start to go downhill.