In the past, when I first started getting parts rendered from Shapeways, I submitted some STLs in inches and never had a problem. So most likely the problem was in the upload of the STL.
In having to deal with many overseas contractors, I quickly switched over to Metric. The fact that the increments are more fine (.001" = .0254mm, and 1mm = .0394") allows for much more intricate detail when four decimal places are factored in.