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I recently read a thread with the exact same problem at Amazon: even though the guy was actually a US resident with a US credit card, because he was in the UK on vacation, the server refused to let him download the book since it was not officially available in the UK. Even after a prolonged discussion with Amazon support and him threatening to drop the service... So it's not just B&N.
I completely agree though that they should make it way more clear that that is the issue, rather than a useless generic error message. But also again, B&N is not the only company I have experienced this kind of issue either. Not that this should be an excuse.
As far as a practical solution goes, if on the administrative/account end of things you were OK, you should be able to use a US proxy to get around the BN/Amazon servers identifying your current location based on your IP address... It's a bit technical though.
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