Because the anti-farang sentiment has never been higher. There's an explosion of foreign people living in Thailand and it's pushing up cost of living. I don't blame the Thai's, they are just protecting their own interests. It happened to my country too (Australia), it was taken over by indians, chinese, middle eastern, sudanese. Obviously it's annoying for us but just be polite and dont break any rules you'll be fine.
It was cash deposit at a western union office, they charge an extra fee for that (couldn't have been an additional 7.5%) so either your calculations are wrong or something else strange has happened.
Just did the recalculation with the cash pickup option. The difference came to 2.13% so whilst it's a worse option yes - still nowhere near 10%. I would say if you're sure there was no dodgy stuff then whats happened is you did a recalculation at a time after the transfer when there was a MASSIVE currency swing. That's the only thing I can think of because 10% is unheard of.
Your 'friend' ripped you off, very badly. I'd urge you to investigate that immediately. As can be seen here, I'm getting a total conversion on a $5000 AUD transfer that is 0.46% shy of the market currency rate. 10% is an absolute scam, your friend undoubtedly scammed you.