They make an awfull lot of money selling actual room nights (think Google-scale a lot, per employee, although the money culture in both firms are opposite to each other), and actually do cancel bookings and even sometime refund non cancelable ones. They are definitively harsh on the business side, especially when negotiating commissions with hotels, especially since it's always easy to justify ("that's for our users"). But this is not a scam.
You might have had a bad experience. No amount of money spent on customer care will ever balance out a big firm being 100% money driven as opposed to reputation driven, and fundamentally not caring for an individual user. So yes when you are that one user who felt through the cracks it feels bad indeed.