Uh, BA doesn't charge a fuel surcharge for Alaska, American, LAN, Royal Jordanian, Air Berlin, a number of other partners. The Cathay surcharge is something like $40 USD for a route like BKK-HKG or even JFK-YVR. Only on longhaul is it more like a couple hundred dollars (and it's still a lot less than BA's YQ; there's a thread on the CX forum that tracks it). BA and IB are the ones where you'd get hit badly with surcharges.

So, no, not so much. That's a somewhat misleading statement- Avios are very useful for domestic flights in the United States when you're in a city with lots of AA/AS flights, without surcharges. The one catch is Avios are segment based (so SEA-PDX-LAX costs more than SEA-LAX- though a single flight number should still work...)