A couple of days ago I cancelled an upcoming award stay at a Hilton property because the Marriott property I prefer in the area dropped its AAA rate to what I consider a reasonable level. Not dirt cheap, just reasonable. If Hilton doesn't want me to cancel then they need to provide a better value than the competition -- a carrot rather than a stick.
This nails on the head why there's such a policy. You really didn't want to stay at the hotel, but didn't want to pay a higher rate elsewhere. So you booked the Hilton rate with the full intention of cancelling it.
Hilton is simply saying "Make a decision dude!".
It can also be a reason to drive people to sign up for the hhonors program, which no doubt will promote the no-fee cancellation policy if such a policy was to be in effect for that hotel.