Simply not true. You can eat unlimited calories and do no excercise on the Atkins diet, and lose weight. It’s all about carbs, especially “bad carbs”.
Very few people can stay on the Atkins diet for long though.
Why the Atkins diet doesn’t work (1 of millions): http://www.zonediet.com/blog/2011/01/why-the-atkins-diet-doesn%E2%80%99t-work-and-never-will/
I assume you were checking your blood sugar levels through out. You may have given yourself Type II diabetes.
As a former physique nut, I have been on countless diets, my favorite being the low/no carb diet. I can tell you that I was able to maintain and even gain some weight on an atkins type diet, I had to cut back before I saw significant weight loss. That said, man can I pound down the food...
It really is an energy in/energy out equation, what the diets do is modify either or both sides of the equation. For me, low carb diets curb my appetite, thus I eat less and lose weight.