I'm speculating, but the rationale for the minimum per flight had to be that some frequent flyers were doomed to a life of 200-300 mile mainline flights while their colleagues might have been "lucky" enough to get an assignment that required that they fly halfway across the country on a frequent basis.

As airfare is not priced per mile flown, the short-haul frequent flyer might have paid fares as high or higher than their colleague. Especially if the long-haul colleage was not based in a hub and thus paid lower connecting fares and if their destinations tended to be competitive, cheap routes. At the end of the year, the short-haul passenger might have displayed tremendous loyalty and, more importantly, might have provided higher revenues and consequently, more profits than their lucky colleague who racked up lotsa miles on cheaper fares.

Since airlines didn't want to make employers angry (by directly rewarding dollars spent), without a floor on the miles earned per flight, the airline risked angering the short-haul flyer who might start asking why they didn't earn enough miles for either status or that coveted free trip when their lucky colleague long-haul flyer earned both.

Solution: goose the earnings of the valuable short-haul flyer to reduce that disparity in miles/status earned. By telling the short-haul flyer that they'll always get at least 500 miles per segment (I think it was higher in the beginning), they can see that status and that free ticket to HNL are within reach. And that short-haul flyer is less likely to go complaining to the boss about the fabulous rewards lavished on their long-haul colleague. Peace and harmony abound. And those extra miles didn't really cost very much compared to the extravegant short-haul fares they caused the short-haul flyer to purchase.

Fast forward to 2008: US eliminates the 500 mile minimum to "to help offset record fuel costs." Losers.

http://www.bizjournals.com/triad/sto...1/daily25.html

Later, after much complaining, US has to backpedal some and reinstates the minimum for elites:

http://aviationblog.dallasnews.com/2...te-bonus.html/

http://phx.corporate-ir.net/phoenix....657&highlight=