I don't think MR elite status comes into this at all. Elite room upgrades are to better views, bigger rooms, etc. and the front desk was right that it doesn't come into play with room location at all. And if the place was full, it was full, otherwise I'm sure they would have been happy to move you to a closer location (regardless of MR status).

It'd be like saying you wanted green towels but all they had were white. It doesn't matter what status level you are; it's simply irrelevant to the task at hand. They wouldn't have green towels for a platinum premier, either. For all they know, you could have complained if you had a closer room because you wanted more mental separation away from the conference!

I don't know if I'm explaining myself very well at all, but I don't think this is an example of them not valuing gold status.