I think I know the store you are talking about. Very hard lace to walk into. Everytime I've held a dog there though, they haven't been sick (so can't really report or anything). There was a Yorkie in there a couple months ago that seemed quite old (for a puppy store). He had been there awhile.
Love him.
It's hard to watch and I'm always tempted to do what you did. But because you just can't leave a Yorkie from there after you hold it (understandable), I'd just avoid the place. They just don't need anymore money.