All too familiar scenario, but I have a little insight into this that might help. This may not have been what happened to you, but this is they way these guys work a lot.
The people who book festivals (especially small ones) often work for the chamber of commerce or have some other job and aren't really good at handling the booking. They don't like to tell someone to their face or on the phone that they don't want them, so they tell them to turn the material in, then they don't get back to anyone until after they've booked the acts. That way they don't have to tell anyone "no", they just say "I'm sorry, but we're all booked up".
Furthermore, some of the people like to get alll the booking done early, so they book up well ahead of the cutoff date for submittals. There's a huge advantage to getting your package in early. Not only that, but sometimes only after they see your package for a year or two, do they warm up to it and book you.
Lastly, some festivals like to book different acts which makes it tough on rock bands. There are a couple steel drum bands here in Seattle. They get a lot of summer festivals because it's different, but they sure aren't crowding us out of the club dates the other 9months out of the year.
In summary, a lot of the booking folks for festivals don't know what they're doing. Just get your stuff in early and keep submitting the packages year after year. I hope this helps.