This is insane. I am absolutely for freedom of contracting (which would include Marriott creating onerous terms such as the one discussed in this thread), but freedom of contracting runs both ways. If Marriott (and its franchises) wants to impose these sorts of terms that run contrary to common sense and reasonable customer expectations, they must absolutely make it clear prior to booking.

A close read of the the T&Cs mention "standard cancellation fee will apply" - but the standard cancellation fee is almost universally the booking rate (1 or 2 nights, or the entire duration of the stay in the case of some resorts). In the context of the booking rate being points, a guest has no way of knowing what the cancellation fee is at time of booking.

For hotels like the St. Regis Aspen, these are not small amounts. A $7000 cancellation fee (or "no-show" fee) should be plastered all over the points booking reservation page. It runs contrary to intuition, and Marriott has an obligation to its customers to be transparent about the terms and fees of a contract - especially when they can rival the cost of a new car in some instances.