> What reason would NSI have to deny the transfer? The domain is not expired,
> indicating it's paid upto date?
Most likely you did not correctly answer the confusing message (or never
saw it) they send when someone tries moving a domain away from them.
They have been sending these messages since before June 1st. They say the
messages are for consumer protection, I say they are just to protect their
own bottom line since if you make it really hard for your customers to
leave you, they will eventually give up.
P.S. register.com does something very similar. In my opinion, both
of these registrars tactics are very unethical.