I think one reason why a simplistic, dollar based system (based on $ both earning and redeeming) would not be that great of an idea, is that it would be _too_ simplistic and too see through.

Many people can kind of cheat themselves into using their favorite airline even when competition is cheaper, by assuring themselves that the miles they collect make it worth it.
Try to do the same with a simple $ based system: Say a ticket with DL is $300 and ticket with US is $270. Assume you're collecting DL "dollars". Every DL dollar (that you get by using $1 on DL), you get 0.05$ to be used on a future booking.
Now try to convince yourself that those $15 dollars you earn are worth more than $30.

I think a $ based FFProgram would make people more price aware, which probably is the last thing the legacies want.

Also while traveling is usually something you either want to or need to do if you decide to become a customer to an airline, spending money on traveling is probably something you want to do as little as possible (or your employee wants to do as little as possible).
Therefore I think it's at least psychologically a lot easier to get people to want to travel more miles, than to give airline more money (even though the two are obviously connected).
At least for me it is a lot easier to think "I'll try to fly 10 000 miles more next year and get this and that" than "I'll try to burn $2 000 more on traveling next year and get this and that".