I received the following feedback from an SF customer service agent, and I am not sure I understood him 100% correctly. You are able to edit the code in a managed package in developer, trial, and sandbox orgs even though you can’t see it. Unfortunately you can’t edit code in a managed package in a production org. The edit button would not be there. BUT you can push the changes that you made to the class in the managed package in sandbox to production via a change set or the IDE (I know he stated that, but I am unsure how it would work in practice). Could an ISV use change sets or do they have to wait on patches? He also said this type of change was updateable. Does anyone have any feedback on whether a change to a managed package component can be made outside of packages and patches? I am pretty sure that it can't unless I am missing special privileges, etc.
I guess the biggest question I have is why the "edit" button is there at all for a managed package installed class. All the other buttons normally included in the ui for apex classes are not there. It doesn't seem I can save a managed installed class in the console though.