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Any modifications done to vehicle lighting (safety is important) without DOT registration numbers is illegal...but fuck the police anyway. You messed up by taking your car to the dealership (Toyota itself has nothing to do with this) as they are masters of making money. I bet if you asked them to remove the niteshade they would instead say you have to buy new tail lights. I don't know how your state is setup but what I would (could do this in my state anyway) is take it to a different place and explain to them why you failed the inspection. Also tell them you removed the niteshade and reapplied it in a lighter coat so that more light shines through and see if they pass you.
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