Credit Cards reducing limits?

I just had my limit reduced with Citi bank and I'm pissed. I've been with them for 10 years now and for the past 6 months had to carry a balance of $1000.00. I paid it off last week and just got a call from them saying they reduced the limit down. They give you this PC crap about how the credit bureaus are reporting your credit but I got an increase from another credit card about 1 month ago. I don't get it. Why do they do this and how can they get away with it because doesn't it hurt your credit score??