Is the inside of a coconut supposed to be soft, when you buy the cut, unshelled version?

You may have as some said ended up with an old coconut or you could have picked up one of the very young immature coconuts. The inside of those are very soft as you said like jello or a pudding like consistency. It is also called "Jelly Coconut"

The flesh of a raw coconut is pretty hard and dense. To get the same consistency of packaged coconut you have to grate it. (Learned when my grand daughter wanted to buy a whole coconut in shell.) I hate to say it but what you got may have been spoiled.

It was so old it was beginning to rot. You should have taken the remnant back to the seller and insisted on a fresher one or your money back.

Cocunut is hard, and the flesh may be gooey on the outside a little. But fresh coconut is hard.

it was old, it should not be soft