Getting caught up in the moment can be a bitch at times (Ted and I have both been there, done that). It's how we handle it that determines whether the experience will remain a bad memory or turned into a learning experience where we can say, "that sucked, let's not do that again", forgive ourselves and move on.
You and your wife stated your rules. The other man didn't follow them, shame on him.
The one thing I saw that you and your wife could have done differently is instead of her saying, I'm not ready for that and not yet, would have been to say, "No, we said we were soft swap only" and you backing her up. By saying I'm not ready and not yet, I can see where the other man could have gotten the wrong message and thought it was okay to proceed, and your comment of soft swap being out the door and your wife letting him fuck her a second time probably reaffirmed that in his mind. Hindsight is 20/20 so don't beat yourselves up over this.
I think you two handle it rather well. You didn't cause a scene, you both acknowledged what happened, you talked about it and I don't detect any blame being assigned to either of you...good job!
From what I'm gathering out of your post, the only two things that really happened were you had a full swap without really knowing the man...not nearly as big a deal as if you had never swapped before and this happened, and no protection was used...yeah, I'd be pissed about that one too, but here again it's our responsibility to see this happens as well as the other person's. I also feel you are a bit upset at yourself because you couldn't maintain an erection and have your fun with the other ladies, especially since your wife fucked the other man.
I still feel you two did just fine and are going to be just fine.
As to is this common at hotel parties...yes and no. You will always find those that will try and push the limits of others no matter what venue you are at. With experience you learn how to deal with the pushy ones, forget them and move on to those who are more respectful and fun.
Teresa