I'm not sure how to interpret the "rejection" status.

If this is the USPTO's way of winking to the patent holder, stating, tweek and resubmit to strengthen the patent ,now knowing how the market tech has evolved since the early 1990's, then this is a good thing perhaps...long and drawn out, but eventually good, if you can hold out that long.

However, if it is this easy to swat down what they already OK'd, then the power of the patent is in jeopardy and then how does one properly evaluate intellectual property across the board?

I guess we find out the hard way.