Shouldn't have anything to do with you being late. Renting a car is not a spa reservation.

Having said that, smaller, local or franchise locations only have a few cars on hand anyway. I've rented from locations that operate out of an auto repair shop with 3 vehicles sitting in the lot. If I'm a few hours late I could see them giving it away (although I'd be upset). However, if they attempted to "sell" me an upgrade that would break the straw.

This problem is not unique to Hertz, only that Hertz has more of these franchise location set-ups than the other two large car rental companies. So, it can get more pronounced at Hertz. It's why I prefer renting from airport locations, even if it means it's sometimes out of my way to get there. Better selection, better customer service, and none of these "you're late, you're a bad boy" speeches.

I'd write a letter to customer service & tell them of your misfortune.