You asked why do dealers keep leaves and stems in their bags, and as a former dealer myself I might be able to shed some light.
Personally, I NEVER sold stems, seeds, or leaves on my buds. Around my area it was kind of hard to find a reliable source, and I would often get stuck with shit bags like your friend did. However, I operated how you should, like you own a business. I was all about the customer. I, too, felt that you should do unto others herbs as you would have them do unto you. I could remember when I was a young buck and would get a bag that would have excessive stems, leaves, or seeds, and being totally pissed off and never want to deal with that person again. So, when it was my turn to deal, I made sure I never pulled any of that bullshit.
But, back to the reason WHY dealers do it. It comes down to two things, time and money. If you buy a lb. that has a lot of stems, leaves, and seeds, you have quite a lot of unwanted bullshit on your hands. Most dealers say fuck it and just pass it along the line. No one in the chain wants to suffer the loss, and they feel that since they got it they might as well pass it down the line. I remember one time, I bought a bag absolutely loaded with seeds. Luckily, I had a helpful sister that wouldn't mind workin with me for bong hits

, so my time was reduced. But nonethelss, we spent over an hour going through the whole thing taking out the seeds just so people wouldn't be buying them. At the end of it all, the stems and seeds came to probably a half an ounce. That half an ounce could have been split among my bags and sold to everyone at a personal profit to me, but that's just bad business.
Dealers just don't want to own up and suffer a personal financial loss for their customers. It kind of sucks, but that's how most dealers are. They are lazy and they know they'll be able to sell their shit anyway.
EDIT: And about the fronting, I would NEVER charge extra to anyone. Most people I dealt with were my friends, but even those that I met through dealing I trusted enough to pay me. I asked people before I fronted for a reasonable time frame of when I could be expecting payment, and if not having that much money for that amount of time would be a big hassle, I would either offer to front less, or just explain the situation and apologize. Sometimes payment would be deferred for up to a month, but I could still operate without that money, and I knew that those people would be most appreciative for the favor.
Dealers are mostly just hustlers looking for the short term buck. They don't realize that generates bad customer relations and that while fronting free of charge might mean $5 less dollars right now, its going to pay off in the form of more business in the future.
So why do dealers charge extra for a front? Because they are stupid, short sighted, and don't understand how to run a business.