I don't have solid evidence but I got the vibe that this hotel does not like the idea of upgrading people for free. In addition to being a very small room, it was the closest to the elevators. After getting denied the upgrade, I asked if we could get a room away from the elevators. The clerk went to another guy, presumably a supervisor, asked if we could be moved and got an angry response (I wasn't close enough to hear words). At that point, I just backed off altogether.
If we were the last people to check-in at midnight or something, I totally understand not getting the room of your choice. But there were others checking in after us, in the same predicament. I'd love to be proven wrong, though.. hope my experience was an isolated incident and not a future sign of how Plats get treated.