I have the 8000L (9mm Compact) Stoeger Cougar. A truly excellent gun it is. The locking rib on mine does show some slight wear on the front end, but that is normal. However, it is not "beaten up" as you describe yours to be. So, it does sound as if you have a problem.
I can't vouch for Stoeger's CS - I've not had any occasion to use it. However, give them a chance - I'm hopeful that they'll make it right.
I am not surprised that they wanted the whole gun back for repair on this. That makes sense - the gun is a machine that works as a package. If only the slide and barrel were to be returned for service, the replacements might not fit quite perfectly on your frame. Then, you'd have a problem all over again. Further, the problem COULD lie with the "locking block", which controls the rotation of the barrel. This piece must fit well for the system to work as designed. If the timing is off, due to an out of tolerance block, then that could lead to the barrel lug getting beaten up by the slide. Just a possibility, mind you. But, as I said, it makes sense to have the whole gun back in the shop, to give it a complete going over.