I guess one important question is still the issue of availability vs. costs. Just booked 4 C-Class awards AMS to HKG for July/August on LH - no availability whatsoever on BA for these two months. I guess with the increase in the number of miles out there chasing awards, a price increase is the only way out for airlines. Higher C- and F-award prices is obviously also consistent with expected increases in 2011 for cash fares for C and F.
For a family with 2 kids < 12 yrs and a Senator in the family, M&M is still a good option, where we pay only for 3 awards for 4 pax. As long as this stays, it is attractive, at least for me. Now, if they could only improve the C-product (both soft and hard)...
Finally, I found the anouncement on the M&M web-site pretty straight forward (apart from the embarassing issue of not linking the new award chart). They made it clear that there are good and bad news and referred clearly to "increases" not "adjustments" or "enhancements". I wonder whether they had planned to come out with this a few days later and were "forced" into more rapid action due to discussions on FT, which explains their somewhat odd wording and IT glitches.