And back when that was an issue, it was. Since the close of registration (for advance entry only events) was generally a day or two before the event there was usually time to find an alternate and thus still give a refund, but it wasn’t guaranteed.
If registration for a section is closed once it is full, then the player wouldn’t have given notice of the withdrawal before the close of registration for round one.
Of course, the entrant would have to know when submitting the advance entry fee that it would not be refundable. It seems reasonable to me that an organizer who turned away entries because of a space limitation should be entitled to retain the entry fee of an advance entrant who decides willy-nilly not to play in the event. (If I were the organizer, I would consider being lenient in the case of a genuine emergency preventing an advance entrant from playing in the tournament.)
While this is technically true, I would be hesitant to rely on it as a justification if I had not announced the policy in all pre-tournament publicity. Under this theory, the player can not know exactly when the registration period will close (and hence what the deadline is for a refund) at the time he pays the entry fee.