Not sure what kind of advice to give. You know he is not a good fit for you. I think that you are lucky that you get to see him and spend time with him and check in on him. It's normal that giving him back would be bitter-sweet, but do you think he is not in a good place? I guess I am unclear what the issue is. What options do you have? You could ask for him back but it sounds like you know that is not a good idea and the owners probably aren't OK with it. Or you could stop dog-sitting him and never see him again and avoid the hurt that comes with sending him back. But, did you give him to the family with the understanding that since he cannot be boarded, you would watch him if they go away?
The aggression is probably hereditary as petstore dogs are very poorly bred. Kennel cough typically does not require three weeks of isolation, but I suppose it's possible. It would not make a normal dog aggressive. Pet stores should be avoided at all costs and in many states they no longer exist for very good reason. Most petstore dogs come from puppymills.
I think the new owners are smart for not taking him on vacation. If you take a dog into public with a known bite history and the dog bites, you could be in serious trouble and in many cases the dog, as a repeat offender, will be euthanized by the county or state. If the dog bites, he must sit in the shelter for so long either way in quarantine. Keeping the dog away from people is best for both the dog and the general public. If I had a dog with aggression, he'd never leave my property except to go to the vet or a trainer. I would not put my dog or other people in harm's way.