Karan,
I do agree there.Many schools also do it just when they decide not to admit any applicant, for any 'other specific' reason apart from GMAT and counter intuitively, the 'GMAT reason' actually starts making circles.To elaborate on this, on one forum I read about an Indian engineer ruing the fact that he applied to one top 5 B-school with a score of 720...and they posted a declination note saying that, maybe if he were to improve his score or get 3-4 more years experience, than they would probably feel much inclined in accommodating him.The sad part is, the guy actually took the GMAT score to heart saying that maybe he 'does' need to improve instead of looking at the other statement.(?!)
I think its also important not to believe every haphazard suggestion being put on many forums, especially by student admission counselors...one surprising comment I looked into recently was of a student ad -counsellor telling a 99% GMAT guy that his 32 years of age might be a negative check in his B school applications!