Can't speak for the OP's situation, but my Company has something similar to this--we can stay in all sorts of 4 and 5 star hotels, but one particular chain (that's no more expensive than the others) is specifically forbidden. Personally, I have a feeling we had a bad negotiation with them or a bad conference situation that they didn't resolve and we responded by pulling all our business (we're a pretty big company with a lot of travel).

So I suppose something like that is one possibility.

My Company has a Y only policy until you're a certain level within the USA and Canada and Mexico, including Alaska and a J only policy for everyone outside those locations or to Hawaii. Special approvals are always very possible though (i.e. if you have to go to Alaska or if you're taking a West Coast to East Coast red eye).