If the meal was never served, simply dispute the charge. SHould be easy to do as you have the hotel's own report on the incident.

Some hotels still have great management and line staff that know how to keep customers happy, even when something unfortunate happens. Sadly, many do not as they are now hiring minimum wage staff who receive minimal training, and the turnover is high. So really the hotel's response doesn't surprise me. If you were expecting the kind of service that Julia Roberts received in Pretty Woman, you should need to stay at the Beverly Wilshire and expect to be paying $500+ per night.