Ending candidacy Over Compensation Before Counteroffer?

After the substantive interviews, the recruiter told me that feedback had been universally positive and that the process was moving towards an offer. The conversation was very positive. We also discussed a possible start date and preliminary compensation.

The compensation discussion was not tied to a formal offer. The recruiter presented certain figures as an initial starting point, while indicating that the final numbers could potentially be higher. A few days later, I sent a follow-up email confirming that I remained very interested in the role. On compensation, I said that I had considered the preliminary figures and did not think they met my expectations, but that options did exist within the published compensation range for the position. I did not provide a specific salary demand, minimum, or counteroffer. I said I was flexible and wanted to better understand which components of the package were negotiable before discussing specific figures.

Shortly afterward, I received a rejection email stating that there was no alignment between the level of the position and my compensation expectations. I was given no opportunity to discuss actual numbers.

Is it normal or reasonable to terminate a strong late-stage candidacy based solely on an inferred compensation expectation, without first asking what the candidate actually wants or giving them a chance to respond to the company’s practical ceiling?