Recruiters make money as a percentage of your hiring salary, why on earth would they try to place you somewhere that you are making less? They should be shopping you to whoever will give the most money.
Key take a way from this: never let your recruiter negotiate on your behalf. Once you are at the stage, tell your recruiter to F off and get the best deal you can for yourself.
I agree about the incompetence part, though. Terrible waste of time for everyone involved.