This is just like our firearm laws. The ATF has firearm regulations and the states have their own laws. Just like this case, federal laws and regulations supersede state law. Furthermore, the seller acknowledged the illegality of the act, and deliberately decided to ignore the federal law.
If this were a federal firearm law that one of us knowingly broke, we would be facing prison time, too. Just like our firearm laws, we may not agree with them and believe they should not exist, but they do. He willingly took the risk and lost.