We also are just assuming that Chase is paying .01, but don't know that for a fact. I suggest the Diners Club conversion ratio of 1.25:1 as a hint that it might be higher than a penny a point.
There would still be a disparity long-term between Southwest selling to Chase at 1.25 and redeeming to pax at 1.43 as NSX suggested.
There is an X factor that would justify losing money on points. The value of customer loyalty generated from Rapid Rewards.