All a matter of personal taste. Some people don't have the time or patience to come up with "good" uses of miles, or don't have a stable enough schedule to plan trips far in advance and get those good uses of miles, and for them PWM is probably about as good as any other use. For those of us who do make the effort to find low-tier award seats, particularly in business class, this would be a bad use of miles.

The $400 off for 40,000 miles offer would be the same regardless of whether you were buying a $405 ticket and getting it nearly free, or a $2,400 ticket and bringing it down to $2,000, so the price of the original ticket doesn't really matter. If using miles in this case helps you feel like you are getting an even better deal on what sounds like already a pretty good price, then that may be worth it for you. But keep in mind that same ticket, on certain dates, could be obtained for about 3x those 40,000 miles (125K) and about $300 in taxes.