My theory: The recruiter may have a few spots to fill and several candidates. So say, there are 5 eligible candidates and 2 spots to fill. Knowing that not every one offered a position will accept it, the recruiter tells all of them they'll be given an offer. That way those candidates are less likely to accept an offer elsewhere and 'stay in the pool'. Recruiter offers the position to two and waits to see if they accept. If either doesn't accept, they make an offer to the next candidate. In this case, the spots filled before getting to all of them. Since they had been told they would receive an offer but no spots were left, the recruiter decides to end all contact.
If they were more honest, they would have to give offers to only two. The others candidates are likely to move on while the recruiter waits for a response. If the two formally offered jobs don't accept, the recruiter finds the other eligible candidates have moved on and has to go interviewing more people.
Yes, I think this is pretty standard all across the board, in every industry. Don't throw the grade "B" fish back just yet. Smart candidates do the same thing--"You're my top choice" etc., even while busily interviewing elsewhere. It's all just a game everyone plays, really nothing new here.
If they were more honest, they would have to give offers to only two. The others candidates are likely to move on while the recruiter waits for a response. If the two formally offered jobs don't accept, the recruiter finds the other eligible candidates have moved on and has to go interviewing more people.