Cancellation/Change policies can't be changed on a whim on existing rates, with the exception of redemption rates (since it's the same rate code always all the time). If OP booked on points, OP very likely still has the ability to modify the reservation to a different date, a different cancellation policy, and cancel the reservation. Should OP have to go through those hoops? No, but it is not as dire as originally described. Points reservations inherently can't be non-refundable. Points are always refunded upon cancellation, therefore the reservation has to remain changeable.

For an example for paid rates, let's say I am a revenue manager and I establish rate 12RMOC (the most common rate plan for member flexible) for the entire month of February. It will have a 2 day cancellation policy (again, for example). The rate will still have the ability to dynamically adjust to supply/demand, but the cancellation policy remains the same for all reservations booked under 12RMOC. Suddenly, a special event happens the second week of February and I need to adjust strategy. I would have to remove availability for 12RMOC and make 35ABCD (prepaid rate plans vary widely but the 35 part is right!) the only available rate plan that has a 24-hour after booking cancellation policy, but again the rate is able to dynamically change. I could not just change 12RMOC to pre-paid non-refundable without making every single reservation for the entire month of February pre-paid non-refundable, which would probably cause a riot.

These are just example rate plans, but the entire system functions in this way with the exception of redemption reservations, which are easy to cheese out of anyway.