Obviously (based simply on the ratio of premium seats to non-premium seats) you're in the minority on that.

But indeed class of booking largely trumping status is true even on award travel. You get the same or even better lounge access traveling "way up front" on award travel than you get traveling in the back with AA Platinum status (internationally).

So, yes, the more you "exclusively" use premium cabins (whether paying or using awards), the less relevant elite status is. Which is why I don't mind redeeming for business class (or above) international travel outside of oneworld, even though I only have meaningful status on oneworld.

Now, back to your first question. In part, they're making so much profit because they're giving away little while promising a lot. If they gave away all they promised, it wouldn't be a good profit center! So I don't see why it being a profit center for them is in conflict with it not being the best experience for you. The best profit center I would guess would be Delta, where they trick people into collecitng miles that few seem to ever be able to redeem at good value (much less than at UA and AA, anyway). So the airline sells the miles, but doesn't have to pay if nobody can redeem!

Status is much more relevant to the person whose company won't book them into anything above coach, and they have to use that status to either upgrade or at least get into a "better seating" section within coach. On most planes these days, there's no such thing as upgrading beyond the class above coach (whatever it's called), and up front there's no "betrter seating" section within a cabin that status can get you into.

Similarly, in premium cabins, you get boarding priority and check-in priorirty and free bags at least to about the same degree that status gets you.

So status benefits are clearly not aimed at those who exclusively fly in premium cabins. But what benefits could they create that would appeal to those who exclusively fly up front by nature of their ticket?