Wow. That's awful. I'm not terribly surprised. I've had some grooming disasters at Petsmart. I've also had jobs well done. It varies wildly. I think the good groomers work there temporarily and move on when a better job comes up.
I had one that called me when my collie was to be finished only to tell me that the only option was to shave him. I said no thank you and picked him up. He was not in his best shape since I was traveling and my husband missed an appointment but he wasn't matted. It was a big job and I told them I would pay accordingly. I took him to a mom and pop kind of place and for the same price as Petsmart, he was beautiful. She said he was no problem at all! I'm guessing the staff at Petsmart that day was busy and didn't know how to deal with a rough collie.
LOL, awww how did you know it was petsmart

You are right about good groomers working there and then moving on. For the most part thats what happens. It's a great place to start, they'll send anyone to grooming school, but if you really want to learn more than just the bare minimum you usualy do have to move on. I was lucky enough to be in a training store where the salon manager/ acadamy instructor really knew her stuff and passed it on. She quit though before I was completely finished with school because a higher management position became availiable. Just the way it goes I suppose. I also had the benifit of the help of several professional handlers from the time I was 10 or 11, so I really went to school just to learn the pet versions of the cut and to say I did.
I have found though that almost any place where you can board your dog's and then have them groomed is less than ideal. Though I am sure there are good places out there, just not in my area. It's my feeling that the owner should see, or smell, the dog before the bath/groom. Not to mention, espeicaly with poodles, a dog who comes in all brushed out may be matted by the time it goes home and the owners dont understand WHY I had no choice but to shave a dog that in there mind wasn't matted... the last time they saw it.