It interested you enough to read it AND post a reply.

Who gets the sofa bed? I think the person paying the bill calls the shots.

A lot of this depends on the culture. In certain Asian cultures, the host is expected to offer anything and everything, and the guest is equally obligated to refuse. If OP and his friend were Indian, it might have gone like this:

"You can have the big bed."
"No, you can take it."
"You are my guest, please take it."
"No, but you paid for the room."
"Please, I insist."
"No, you must take it." (heads over to sofa bad)
(Pushes his friend off sofa bed and sits on it.)
This would go on for several minutes until one of them gave in and took the big bed.

In western cultures, which are more direct and to-the-point, this usually doesn't happen. In American culture, I would say that it would be polite to ask once, which OP's friend did. However, pushing the issue further would be rude.

You forgot the part where whoever got stuck with the sofabed then badmouths the other to all friends and relatives! :p

See, that's the problem with human relationships, you try to help someone and you may end up getting in trouble, being taken advantage off, or the other person being ungrateful...Just let them go get and pay for their own room, and everyone is happy...

Same thing happened to me in Las Vegas when i had a comped suite my friend was pissed off i wanted him to sleep on the couch lol

The friend brought it up first, who gets the sofa? This is just a buddy who is getting a freebie because OP already had a room. Wrong, wrong, wrong for friend to even ask. Being on the receiving end of a favor already, friend automatically should have taken the sofa bed. When friend asked, OP's instinctive courtesy kicked in without thinking to ask what friend preferred. For friend to take advantage of that to get the bed shows NO CLASS.

My answer to the question would have been.. "I paid, I get the good bed, sorry!".
Then given a hug.

Hug is optional, of course.

It seems I underestimated you and a few others then!

Though you surely have to accept that it is not the norm to do so in places like the US/Western Europe - and that has nothing whatsoever to do with people from these regions being "impolite"?

Yes, that would have been the thing to do.

Then you have missed some opportunities of living closely in a very caring society.

I don't think having the guests sleep in the guest room instead of the master bedroom is reflective of an uncaring society.

I did not say that. I said " very " .....caring is a matter of degrees . The underlying principle ( may be hard for Westerners to digest ) is after God, Parents are gods, Gurus (teachers) are gods and Guests are Gods in that order.
hence from the childhood you are taught to respect the above.....if think this thru, it is teaching you to sacrifice, something sorely missed in these times of ME First.