What Pantheon did is standard procedure at most conferences, software or any other industry. I've gone to conferences where even the hotel room keys had conference-specific ads on them for the duration of the show.

If the organizers didn't have it in their agreement with the Sheraton to not sell advertising space in the hotel to WordCamp sponsors (or anyone else, since this would have been a great "guerrilla marketing" technique to bypass an official WordCamp sponsorship), then the organizers had no right to push the hotel's hand on this. However, most professionally organized conventions/conferences think of things like this ahead of time and include it in their sponsorship agreements and hotel contracts -- essentially so that only paying exhibitors have the ability to display ads like Pantheon did and so that the conference organizers make money from it.

Look, volunteer-run conferences are great...but when one starts talking about $100K sponsorship packages, it's time to put on the big boy (or girl) pants and start running things like a professional organization.