Here's a counter-point to your legitimate concern: PuddingGuy created a tremendous one-time revenue for AA in particular, and the other airlines to a lesser extent. Since you have to assume that PuddingGuy still needs to keep his day job, it will be quite a while before he burns off all those miles. So, in the meantime, AA has gotten income without having to incur an expense.
Just another example of frequent flyers helping the airline industry?