The concept that most people don't understand in valuation is Opportunity Cost. Simply put, this is the next-best alternative you forgo. In other words, let's assume you value American Airlines miles at 1.5 cents. If you have a credit card that earns you 1 mile per dollar, then you are actually not maximizing your utility, since there are credit cards out there that will earn you 2% on everything. You are essentially "losing" 25% of your maximum utility. In other words, assuming no sign-up bonuses, if you don't value any of your points higher than 2%, your opportunity cost is higher than the value you are deriving from spend.
Figuring out the opportunity cost isn't so straightforward. For people who regularly book last minute tickets or who take advantage of lax change policies on certain awards (elite or not), there can be huge savings to be had over cash.