Happens all the time. An agent is no guarantee of publication. In fact, I would guess that the majority of manuscripts accepted for representation are not published--though no one seems to talk about that side of things. (In a lot of cases, that same agent is able to place another book, though.)
Furthermore, some agents may disagree with your idea of what a "suitable" publisher is. Mine--a top agent at one of the longest-established lit agencies in America--threw in the towel at less than ten submissions, because no other houses were worth bothering with. From
her point of view, that is, which in dollar terms probably made a good deal of sense.
When we parted ways, my book was accepted by the first publisher who looked at it. But from my agent's point of view, she probably still made the right decision.
I have
a post on my blog that talks about the fact that your agent's agenda and your own may not be perfectly aligned. It's entitled
The Difference Between Your Agent and Your Mother. There are a few.
