Sure they can. They can demand anything they want. Your anecdote shows that.
It was good that the case you mentioned the ATF's demand was rebuked, but the agents involved were still guilty of disregarding the law. Did the shop owner press charges against anyone? Were any ATF agents reprimanded or fired?
What would have been the outcome if the shop owner had not been there to stop his employees from turning over the forms? In that case, the ATF would have successfully disregarded the law - and it is doubtful that any charges would have been filed or any agent(s) reprimanded or fired.
And, for the record, the federal government does not have Rights, it has Powers.
They, ATF, didn't demand anything, they asked to have copies. And, in their interpretation, asking isn't demanding and not against the law. Willing and stupid participation of personnel unaware of their rights was what caused a compromise. Until they actually 'demand' at the point of a gun, they have no actual power - only perceived power. And that it is where it is up to the citizen to assert his/her rights.