This is one of FT's greatest unsolved mysteries. I've read many threads that brush upon the subject and most posters don't seem to be better informed than me (zero), but my favorite theory is that airlines pay each other a paltry amount (e.g. .5 cpm) for award tickets, most of which gets cancelled out in the end. If a market based transfer system did not exist, airlines would have even more incentive to follow US's model and simply sell miles on the cheap.