The brake light switch is what limits upwards travel of the pedal. Unless you've been fiddling with it (which I doubt, as you had the dealer do the brakes) these things rarely if ever work loose (there's a lock nut). Changing the brake pads does NOT require adjustment of this switch. If there was not a problem before the brakes were done, the switch won't cause problems afterwards.
More likely is that the spring that pulls the pedal back up has come off. This lets the pedal sag enough under its own weight to cause the brakes to drag, heat up and eventually lock. This usually affects both calipers. Takes
1 minute to fix.If this spring is in place, then the brake job has been done improperly. For example, a badly remanufactured caliper can jam on its slides. Caliper pistons can jam. If only one caliper locked up, then its either a faulty caliper or the job was not done properly eg wrong pads, shims not fitted.
So ... its not total BS, but I think the dealer is trying to weasel out of supporting their warranty.
For a 99 model, its time to yourself find a decent import garage. You're paying perhaps double the labour rate you need at a dealer, and the work/expertise is usually as good or in this case, better.
Stewart DIBBS