I just got back from Apple Georgetown, empty-handed for this exact reason. Currently iPhone Upgrade Program Member, expecting to trade in my iPhone 6s for the new 7 Plus. I was there for almost an hour with an Apple associate trying to figure out the issue. Luckily, they had an AT&T representative present at the store who informed us that at around 1:33pm EST AT&T sent out a notification to them that their servers were being overloaded and it was randomly categorizing numbers as inactive lines. Apparently I got the short end of the stick.
Luckily, the store rep told me that they would be holding my reservation for the rest of the entire weekend, and that they'd personally call me once AT&T resolves the issue. The AT&T rep said this usually happens every year around 12:00pm~1:00pm, because that's when California customers are joining in on iPhone activations, thus flooding their systems.