In that case I supposed a more restrictive policy might be needed
but 3 days still seems excessive.

Not at all. If it were a cheap hotel, then maybe. Not for something
specialty.
A 72 hour cancellation policy is common among fancier hotels. Also, I
run across it all the time when booking international hotels.
Just google something like "hotel 72 hour cancellation" and you'll see
that it's not at all uncommon.