No. This crew gets no slack. It was a poorly crafted, no-sense clearance and they shouldn't have accepted it or simply complied with the non-precision approach for which they were cleared (since the at or above clearance gave them that latitude).
First of all - anyone in 121 ops receiving a clearance to fly a full, No-PT arc to a vor/dme-C in the mountains needs to have their guard up. I think their eventual choice to get the ILS should have been exercised upon arrival looking at the wind trend.
But, they decided to accept the VOR. Okay, fine. But, when that clearance comes in, how can anyone flying a modern FMS equipped jet not have at least a couple of HUGE question marks over their heads? They're flying a published approach.
#1 - 7800 MSL isn't even a depicted altitude on the approach.
#2 - Why would ATC give a clearance that may require us to climb after we've already descended (I say "may" because they did have the option to stay at or above 10K)
This stuff about some RJ drivers being instinctively prone to comply and ask questions later is nonsense. Little boys worrying about making ATC mad need to grow up, put their big boy pants on and figure it out.
We input the approach in the box, check the points/altitudes and brief, with someone cross-checking the box with the plate. At some point, you would think they had to at least discuss the fact that the lowest altitude on the arc from CEGAN to BRKET was 10,000. So, they either comply with their clearance but stay at/above 10K until starting the lead turn off the arc, realizing that ATC set them up or they CLARIFY.
But, since neither of those two options were exercised, it seems pretty clear that these two guys were grossly unfamiliar with the approach they just accepted a clearance to fly. I obviously can't say for sure, but it seems like a reasonably conclusion that they didn't brief and didn't cross-check FMS inputs. If they did either of these two things, I find it hard to understand how they got to the point of a GPWS alert.
All that said, this ATC controller was an idiot. Someone needs to educate him on the huge difference between legal and smart. Combining an unrelated MVA with a clearance to begin a full-up instrument procedure from a distant IAF may be legal (don't know for sure) but it's certainly not a good practice. We get tested enough on a daily basis from threats we can't control or minimize. We don't need ATC throwing out random Easter eggs because they're too lazy to use an appropriate altitude for a VOR clearance instead of just grabbing the MVA off their screen.