I've done a few domestic awards over the years (plus lots of Canada awards...same award basically, but with a little bit more tax).

Used to use US miles often when I needed to go to smaller northeast airports that were *never* available at a competitive fare from MCI. When I was Gold with them and held the credit card, it was 20,000 miles R/T and no fees other than the security fee.

Still use Avios for short domestic hops, including a last-minute MCI-ORD trip. There was a time when I would have laughed at the notion of using miles for MCI-CHI, but a $200 one-way fare vs. 4500 Avios changed my tune on that one.

Seattle in the summer can be a good spot for miles, although availability can be tight. San Diego anytime can be a good spot for miles...especially if you really want SAN proper, not SNA, LAX, or other airports.

Higher fares make for more logical domestic uses for miles, with the obvious caveat that seats can be hard to find at certain times...