There are a lot of "answers" depending on assumptions, and no one who actually knows the numbers will say.

My view is that the typical marginal cost of flying an additional award passenger is very small. A little extra fuel, a drink, etc. So when the flight isn't full, your 25K mile redemption cost the airline very litte. So they can give/sell them relatively cheaply and still make a profit. On the other hand, the savings you get over an actual ticket is much higher, so you're willing to pay a lot more.

With a full flight, the marginal cost of providing you that seat goes way up, so ideally there are no awards on sold-out flights. With greater load factors recently, the average marginal cost has gone up, I suspect, but is still quite low.

Customers will pay a lot, actually costs little = why FF programs are so valuable.