Do you mind if I ask what breed it is? In some more intense/energetic breeds, breeders will do it this way because there is a wide range of intensity/energy level in a single litter and not every member of the litter is going to be good for every home. For example, I'm thinking my next dog will be a Malinois, and while I would like to pick a puppy myself, it seems pretty common for working line breeders to want to match the pup to the home themselves, because not everyone getting that breed is looking for the same thing. Some may want a police K9, some might want a dog for French Ring, some for Schutzhund, some for agility or other sports, and some might just want a very active companion. Not every Malinois is suited for every purpose, and litters can vary WIDELY in temperament, energy level, thoughtfulness/reactivity, etc. My current breed is Boston Terriers. With Bostons, their is a wide range of energy and intensity. My Boston growing up was my family's first dog- pretty easy, definitely intense in her own way but not an energizer bunny type of intensity and didn't really NEED to be worked/trained/given a job to calm down. My current Boston is all go, go, go. She NEEDS a certain amount of physical AND mental stimulation in a day of she'll be a terror at night and the next day, and she is such a good dog largely because she's had very clear rules from puppyhood and I've trained her very dilligently. In another home with less experienced owners, I could see her being a very frustrating dog. She's not aggressive, but she's wildly excitable and a veeery rude greeter, which can get her in trouble. She was actually meant to be my parent's dog, but we all agreed her energy level and intensity is better suited to when I want from a dog (competition agility prospect, as well as one who is a good trick dog and I can take anywhere with me and hike and hang out with anywhere), and not what they want (a low key dog that gets one walk a day, won't get any training beyond very basic obedience, and will just sort of sit around with them except for going on hikes some weekends).
Most people choose puppies based off of either how cute they look/act compared to siblings, or based off of a very emotional evaluation of their temperament. Very rarely do I see people choosing dogs for good reasons, and very often it's "he was the biggest/smallest/fluffiest/I liked his color" or "he seemed to like me the best/he chose us!". A lot of these dogs were probably not the most suited to the homes that took them out of the litter, and in some breeds 'not suited to the home' means that they literally cannot live there once they come into their adult size and temperament and energy level.
Give the breeder a list of things you're looking for in a dog, meet the puppies if you can, and ask the breeder to let you know which pups they feel would be best suited. Some breeders may be receptive to you offering more for your first choice, but just as many will be offended/upset at that. I would probably just trust that they're trying to place the pup in the best fit home, and accept that the one I liked best might not be the real best choice for me.