Should a company honor an oral contract, or must it be in writing (from a legal standpoint).?

I recently ped all the interviews with a company for an internship. The HR representative called me to notify me that I had been selected to receive an offer and gave a specific salary for the offer. A week later before receiving the offer in writing, he called back to tell me that he calculated the salary incorrectly and the written offer would reflect the changes. The new written offer reflects a 17% decrease in salary from the original offer. I would like to know whether the company is being unethical in proceeding in this manner or is this perfectly normal. I feel that the company should honor their mistake, given that it is simply a 3 month internship and the total value of the mistake is about $4000.