The airlines are doing the math themselves and are clearly coming to the realization that they're better off selling perks than giving them away to paupers who happen to fly a lot.
Hard to say, but I generally disagree. I think the majority of elites have a lot of choice of carrier. I certainly do. If CO/United erodes the value of elite status too much, I'll switch 90 of my money to the non-US carriers whose flights are generally a lot more comfortable. One person doing that is nothing, of course, but I don't think the other elites are any dumber than I am...
And, sure, they may TRY to sell them (I received an offer to upgrade about a week before the flight for $300), but of those 16 TPA-IAH F seats, 16 are were filled with free upgrades. It appears that no one is buying.
What is "CO bronze" anyway?