I don't think it's ridiculous at all. Frequent flyer programs are understood by the public (and described by BA) to provide award (i.e. 'free', or basically free after government taxes) flights. BA has made it incredibly difficult to do that, and the "workaround" procedures needed to avoid surcharges are laughable. I don't know if it's technically breach of contract (depends on whether or not they stated that the fuel surcharges are tied to the cost of fuel), but it's certainly unjust enrichment.

No U.S. frequent flyer program operates like this, and hopefully BA will soon be unable to offer award flights to/from the U.S. like this.

I don't really understand why everyone on here is so pro-airline. Is it because they have spent so much time mastering frequent flyer programs to such an extent that they can't stand it if a lay-person is able to redeem a free flight without much effort?

Avios are only NOT a ripoff if: 1) booking international premium seats (which are unnecessary for the large majority of travelers), or 2) booking on a couple of international airlines which do not charge fuel surcharges (EI and AB, whose availability and bookability are hidden from public view) or 3) booking domestic-only short-haul flights. BA should be ashamed for making their Frequent Flyer program so impenetrable, inscrutable, and generally difficult.

Edit: Avios are also a good value for award seats South America where, lo and behold, they have banned fuel surcharges.