I disagree that "the existence of people who are taking downtown hotel rooms but didn't actually want them is entirely mythical" as if so, my group is one of these mythical beasts.
My group of 6 tried to get multiple rooms downtown. Why? Because 6 is the max in the rooms and if one of our buddies joined in later, we wanted to make sure we had the room space available. The more options the better.
However, the idea that rooms would be taken because of these people is 100% off base. In my scenario, I ended up getting extra out of block rooms. Does this mean other people couldn't get those rooms? Most definitely. But, this is what people are forgetting. If someone needs 1 room and books 2 rooms. They now have 2 options...keep the extra room and pay like $1,500 or drop it. What happens when they drop it? Yep. Another gamer gets it.
So, no matter which way you slice it, the same number of gamers get the rooms. First come, first served or lottery really only covers 90-95%, the other 5-10% is luck of the draw / based on persistence...just like buying sport/concert tickets, finding that elusive new released console, etc.