It is my standard operating proceedure to book my car many months in advance (if dates are known) and then every month or so to attempt to make a new reservation - I often save a significant amount because the rates have dropped. And there is no penalty for making a new rez and deleting the old. (in fact, just shaved a couple hundred off two 10 day rentals later this summer doing this).
So, I'm not surprised (and I think I read it some place on their web site, at least the old one?) that modifying a rez may result in a reprice.
No matter, OP, you did exactly what you are empowered to do, book some place else for a lot less money, again, without penalty.
Now you may like Avis enough to book them in the future and Hertz loses you as a loyal customer - that's your choice and them's the breaks for Hertz.
While I sympathize, and this policy does indeed seem to result in some crazy pricing, I would not be as offended as you are.