If this dealer sent in 500 cards and thought 250 of them were undergraded, then he almost certainly doesn't know what he's doing or looking at.
However, you can occasionally get screwed on a submission. I've sent in 100 card lots to PSA of modern cards and had ~90 come back as PSA 10s, then sent in another 100 card lot from the same exact same case using my same standards only to receive ~30 PSA 10s on the next submission. Different graders on different days have different standards. Especially when it comes to grading 9s vs 10s on modern cards. For these reasons, I never send in huge submissions all at once. I don't want the same grader for every card. You could get really screwed if you get a bad grader on a bad day. Then you've wasted your entire submission. It's better to break them up into smaller lots and send them in.
If you are experienced at grading though, and have a good eye for detail, you can definitely have good success cracking cards out and sending them back in. I've cracked out countless cards that I believe were under graded over the years and sent them back in. Almost every single time, they've gotten a bump in grade. Recently, I had a 59 Topps Mickey Mantle I sent in to SGC. It should be a 5, but it came back as a 3. I just rolled my eyes and laughed, cracked it out and sent it in to CSG. They gave it a 6.5. lol
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