They can. I'm sure their provider will be happy to oblige, for a small fee.
No, I mean that you should be able to trade in both PI and PA blocks for a single new PI block. The policy, as written, only allows trade-ins of PI blocks. See my replies to David Conrad in this thread.
Been there and done exactly that. After submitting a request to renumber a number of PA blocks and a small PI block into a /18 in order to achieve some aggregation, it was processed by ARIN almost instantly. On that occasion at least, they exercised good stewardship in not only address management, but helping the route table, an area which they have explicitly stated is somewhat at odds with address conservation. I was impressed.
My fear is that the folks actually processing trade-in requests will insist on efficiency documentation (a la RFC2050) before proceeding. While I'd love to take your word that won't happen, why not make it part of the policy and eliminate any possible confusion?
That's reasonable.