I think closing a dormant account is another instance of the practice discussed in this thread:

http://www.flyertalk.com/forum/ameri...w-account.html

If you have the maximum amount of credit that American Express will extend, they will transfer credit from an existing account. All issuers do this, but American Express does it without discussion. They will send a notice, and you can tweak the credit allocation while activating the new card account. If the limit on the dormant account was modest, they may just close it.

Bear in mind also, that American Express (USA) generally limits people to four credit cards, plus an unspecified number of charge cards. If your new application would push you over the four card limit they may decline it, or they may close a dormant account.

http://www.flyertalk.com/forum/ameri...ard-limit.html