Yes, sadly, and it certainly does look that way - flipping through hhonors award availability definitely reveals some shenanigans. Only premium rooms as you mention, and priced in points at a poor conversion over the market rate at all times of year (e.g. 44k points in the winter when the market rate is 136 EUR and a ridiculous 110k points/night on an example weekend in July when the hhonors refundable rate is 262 EUR).

This particular property is in a high-demand area of a high-demand city, and it looks to me like they simply don't want people redeeming points. They figure they can get cash. Fine.

You're not going to get them to change in any likelihood. My solution is to take your business to the perfectly nice Hilton Barcelona up the Avenida Diagonal which is pricing out at standard redemption rates or very attractive cash rates in the low 100 EUR range over the summer. And having just stayed there, I personally prefer it to the Alexandra anyhow.