sounds pretty normal to me.
i used to work in the travel industry and hotels only sell a fixed number of rooms to the middle men. the rest are sold to the public at a higher rate (the normal rate).
if you look at expedia now, for example - or any other hotel site - then there will be loads of hotels showing as unavailable, but i bet you any money they still have plenty of rooms. they wont give them to the middle men though, because they'd have to offer them at a lower rate.
expedia won't remove the hotel from their site though, just because they've sold their allocation of rooms, because they still want it showing up in user searches. its normal.