Really? That's the first time I've seen a number that low. If true, it would explain how banks can afford to offer 25k miles for getting a credit card. Do you have any data on this, or maybe a quote from Randy or another source?
In my experience, they generally only have that good a bonus on cards with an annual fee. Even if they waive the first year, they never pay out the bonus again, so that's an income stream to compensate too.
Yes, the smart thing is to cancel, but I think credit cards goal as an industry is to make money off of people not doing the smart thing.
As far as subsidizing, you can see this in the Amtrak credit card for instance. It's clearly spelled out that Chase posts 2500 pts and Amtrak posts the other 2500.