In my case, I got this error because I was operating on the wrong configuration file.
I was doing this:
Configuration config = serverManager.GetWebConfiguration(websiteName);
ConfigurationSection serverRuntimeSection = config.GetSection("system.webServer/serverRuntime");
serverRuntimeSection["alternateHostName"] = hostname;
instead of the correct code:
Configuration config = serverManager.GetApplicationHostConfiguration();
ConfigurationSection serverRuntimeSection = configApp.GetSection("system.webServer/serverRuntime", websiteName);
serverRuntimeSection["alternateHostName"] = hostname;
in other words, I was trying to operate on the website's web.config instead of the global file C:\Windows\System32\inetsrv\config\applicationHost.config, which has a section (or can have a section) for the website. The setting I was trying to change exists only in the applicationHost.config file.