Fairly typical FT rant involving picking a sub-section of an obscure rule published by one federal agency to suggest that it excuses the underlying wire (maybe mail) fraud involved when an individual purchases a ticket which he does not intend to fly. It doesn't. And,

Carriers are certainly free to fire customers so long as they don't use inappropriate reasons such as race, religion and so on. The carrier isn't legally required to have a reason (please explain how commercial air carriers are subject to state laws which may or may not be derived from the UCC), but of course, commercial entities act in commercially reasonable ways. Put simply, it's bad business to be irrational. But, firing a customer who engages in inventory spoilage is hardly commercially unreasonable and the public -- perhaps outside of a few on FT -- absolutely understands it. More important, so too do the enforcement folks at DOT.

Same thing is true for FFP's, including miles and perks such as upgrades. Easy to terminate participation. In fact, that's a more common and less draconian approach as evidenced by those carriers which have recently gone after the MS crowd churning tickets through CC bonuses.

Bottom line is that you can't use a regulation as a means to skirt the law.