Should a customer be fired?

There was a very nice debate in our Customer and Market Performance Management class whether a customer should be fired or not. In this case the customer was very demanding and was bleeding the client. On top of that, because the internal processes were not right, the client offered discount to the customer. The case conclusion was fire the customer. It seems in realty also the customer was fired. However, I do not subscribe to this view. In my view, you should explain the customer that we had our internal process wrong and we need to change the way we bill you. If after that the customer wants to walk away, let him. But give him a chance to continue the relationship and be a strategic partner. What say?