Did they give you a confirmed offer letter and then revoke it, or was it just a failure to give you an offer letter?

In the current rapidly-worsening economy, I probably wouldn't consider it obviously improper (just unfortunate) for a company to not make an offer even when it had previously planned to do so. At some level it would depend on exactly how specific they'd been (and whether it was reasonable to take decisions like giving notice to current employer based on that).