I suppose the problem with running the fourth tier this way is that prospective members (folks who could "quality" for the unwritten threshold if they put all their travel on a single airline, etc.) don't know what they'd get in exchange for what degree of loyalty. The rewards enjoyed by opus17's friend sound valuable to me -- enough so that, were I to be a 200K/year flier rather than a 100K/year flier, I might well stick with one airline all the time rather than switch between (say) two.

BUT, there's no way to know what rewards I'd get, no way to call them due if I feel shortchanged (like I'm not getting enough), and no way to sensibly value them as against the well-defined benefits of top-tier status in two different programs (eight VIPOWs plus six SWUs or whatever). That's a problem -- potentially a serious problem for those who (perhaps like me) value specific defined benefits more than the vague (though potentially also appealing) possibility of (literaly!) untold benefits down the road.

opus17's friend apparently probably never knew what he was going to get (in exchange for his ever-greater loyalty) until he got it. That's a lot to ask of a top-tier flier, it seems to me.