You ignore one of the major perks of elite status; that is that you are treated as an elite at all of the program's properties. I would guess that the single biggest reason for Marriott's leading position in hotels is the MR program. While, it may (or may not) be as you state, that is that CY does just fine without elites and Marriott doesn't want us there (very doubtful), Marriott has to weigh that against the damage done to the very reason for its success: Marriott Rewards.