You're in business. Your obligation is to maximise returns to your shareholders

What's the absolute minimum you need to do to retain your existing customers and attract occasional customers while discouraging potential customers from choosing one of your competitors?

As a member of Star Alliance SQ is in almost a monopoly position in the region where it is headquartered. Its sole competition is the ailing Thai Airways. It therefore needs to give minimal benefits to its own regular customers. It's also going to give minimal benefits to regular customers of airlines with whom it is in competition for the same destinations. SQ gives skimpy earning rates for United's MileagePlus members, for example, because they both fly to the US. It does the absolute minimum it must in order to remain a member of Star Alliance. Combine those two factors - minimal benefits to its own members + doing the absolute minimum it must in order to remain a member of Star Alliance - and you've got the SQ business model as it relates to frequent flyers

That's capitalism!