I always find it rich when people blame the hotels for enabling them to do things that are clearly beyond the terms and conditions of the program.

Sure, wonder why Hyatt corporate isn't doing more to the bad actors in these hotels doing this, but that doesn't excuse the wrong-doing of the participants.

Always treat points and awards as currency the hotel (or CC or airline) ultimately controls and owns. That is how (mostly) it works legally, anyways. And it should heighten your awareness that your participation and the value therein hinges on your own good faith/good behavior participation according to the rules. Break the rules, and don't be surprised if your points are gone and you get a lifetime ban from participation. We've seen these sort of purges before in programs on flyertalk -- usually starts with a post like the OP claiming unfairness, and ends with admissions that yeah, they were massively violating things and were just hoping to get away with it. The analytics people always seem to be pretty good at flushing out serial abuses.