I've gotten some of my nicer upgrades / rooms while on points (a suite recently in San Juan), I think most hotels would like the experience to be as rewarding as possible given its a rewards stay! And I read here from others with similar experience.

Then I'm sure there are hotels with the opposite tact and a FD clerk on a jealous power trip like the money is coming directly out of his/her pocket.

The reimbursement is relatively low (like $13 at a RI or FI) maybe to cover consumables but I also think Mr. Socrates has stated if their occupancy rate is high that night (>90% ?), its much, much higher. I've gotten this charges accidently billed to my room & credit card in the past which takes effort to reverse.