Yup, pretty much standard policy. Their reason being that they have already used your entry fee to pay for your medal, your t-shirt, all the water and gels on offer, all the marshals and other staff working on the day and various other things that they can't get a refund on so why should they reimburse you for something that's not their fault. Perhaps seems slightly harsh when it's not your fault either, but if you look at any race and the number of DNSs they get, if they were to refund all of the folk who didn't start on the day it would cost them a small fortune. being sick and unable to participate is just a chance you have to take, unfortunately. And Edinburgh's rules and entry conditions does actually state that pretty clearly.
Some events offer a graded refund system: e.g. if you withdraw 6 months before the event you get 90% refund, 3 months you get 75%, 6 weeks you get 40%, that sort of idea. Some don't. Almost all will let you defer your place i.e. give you a guaranteed entry for next year's event which is a big bonus for massively over-subscribed races like London but not such a big deal for most smaller races.
Sorry you can't run this year. Hope you make it next year though!
Edited: 26/05/2012 at 11:21