The other piece is that the market continues to be flooded with more and more cheap miles, effectively making almost all of our awards cheaper than they used to be.

Take the simple domestic coach award (not that FT'ers redeem those too much...). Long ago, you probably needed to fly a lot to earn the 25k. Sure, there were nice promos and elite bonuses back in the 80's and 90's, but now you can pick up an easy 25k (or more) on almost any airline in as long as it takes to fill out a credit card application.

You might have to buy your miles for $59 or whatever - or they might be free. The offers continue to get more lucrative: a few years ago annual fee waivers were rare or nonexistent.

I also agree that the value in miles/points can rise. Since I track my hotel redemptions more closely for "hard" value than flights, that's where I see it the most. Hotels go through periodic "category creep" which tends to follow a higher-demand travel year. Sweet spots for hotel point value tend to be in that first high-demand year after a period of cool demand. In 2009, hotel rates are very cheap, making paid rooms more attractive. In 2010, I suspect that the points will be worth more: as the global economy recovers, room rates will edge up, but hotels won't be doing a wave of category creep based on their 2009 revenues.