On the flipside, around 70% of all claims are accepted in the first place, which is quite a lot, when you consider that (if the figures I quoted earlier are essentially correct) there are about 700,000 claims made for DLA per year. That's an awful lot of severely disabled people.
There are no official or unofficial government guidelines to deny claims whenever possible. This may be going on at a local level, of course, but if so it's hidden from the sight even of those on the inside.
Perception is important. Some cases include people claiming of constant pain in their knee, but they can sit down and stand up again with no difficulty. If people can walk from their living room to their kitchen with no trouble, is it that ridiculous to assume that they can't walk a fair distance further before any problems kick in? Two hundred metres sounds a bit arbitrary to me, but it's not totally an unreasonable extrapolation.
Most likely is the scenario I've suggested, which is that the government has tried to tighten the rules for qualifying for DLA in response to accusations that they were too loose before, and that at times they have got it right. The vast majority of decisions, though, are not overturned.