A couple of pages in to this thread has a reprint of Choice's official franchise rules, including how they are compensated for award stays.

IIRC, the rates are set by a regional manager. It turns out, it doesn't matter what the point rate is, the property gets compensated the same amount, so they don't really care what the rate is.

The incentive (from a corporate point of view) is that it makes their 8000 point promos actually reasonable (i.e., there will really be a lot of hotels you can get for 8000 points/night) and it provides people an opportunity to stay at Choice properties when they wouldn't normally do so.

You gotta love how this plays out in Europe, since a number of us (myself included) have taken advantage of the lower rates to score exceptional deals.