Sometimes, I hear friends complain that their contractor called and "wants more money" because they found some unexpected surprises in the course of the job.

There could be cases where the contractor is looking for excuses to increase the scope of the job, but I have done enough jobs myself to know that unpleasant surprises are the rule, rather than the exception. When it is safety-related (like the improperly-installed wiring that you discovered), then it is dangerous to ignore it.