I believe this to be a common practice. I have been required to book my room via the conference organizers and know I did not get the best rate available, but thems the rules... The conference had negotiated the rates to include subsidizing comp'd rooms, ballroom rental, and in some cases F&B charges to provide beverages & snacks/meals.

I remember someone checking in next to me complaining that the AAA book in hand was showing a lower rate and the FDC told her that there were AAA rooms available, but since she was registered with the conference she was attending at the property, lower rates were not available to her. I swear I could see smoke coming out the ears!