While it's the system to which they subscribe, it's not solely the credi card companies' fault - But I have seen that firsthand.
I don't know what the scores are now, but back in the old days of cellular, my company required a beacon score of 625, which is pretty decent credit. I had a customer who wanted to buy a phone, but he kicked back a $1000 security deposit. I looked at his report for an old charged-off account from us or the other carrier (only two in each market in those days) and/or a recent bankruptcy as those were the only two circumstances we had run across that required a deposit that of that size.
I didn't see either of those two situations, but I did see where he worked with a credit counseling service to avoid bankruptcy, satisfy his obligations, and protect his credit. Well, as it turns out, he would've been better off declaring bankruptcy and starting anew (6 months after bankruptcy is finalized he could've qualified for a phone with no deposit).
He got caught in the middle and got screwed for doing the right thing, and that's simply unfair. IMO, the credit industry is one of the largest rackets around and is in need of serious reform.