The Hard Rock might very well suck but usually when a casino has a promotion, especially free rooms there is usually a little disclaimer that says subject to availability.

I get these promotions on a regular basis from several of the casinos in Atlantic City.
Come to think of it, I got one yesterday from the Borgata

Generally they set aside a block of rooms making sure there is enough of a supply on hand for paying and comp customers. When that supply is gone...well sorry, you missed the boat.
I think the fact that the phones were constantly busy as you say only demonstrates the popularity of the promotion.

I too have had this happen to me