But can 12,500 be used to get me a flight up to $250? I rarely buy flights that are over $500, or even that near $500.

In my case, I'm tall and I can't sleep sitting up. And so I want to fly in business class (with flattish sleeper seats) for longhaul international, and that's rarely "affordable" with cash, so that's what I use miles for. I pay for most domestic flights, but most of those are under $500, often way under $500. I hate the kind of scheme that, for example, US Banks' Flexperks has, where you only get good value at certain redemption amounts [in their case, just under $400 IIRC) and get poor value at most other redemptions points (because you pay the same number of points for a $1 flight as a $399 flight).

And there can be a problem with using bank-specific-points cards for business class flights: You need oodles more points than one signup will give, but it's harder to combine signup bonuses from multiple cards (in the same program) to buy one $3000 or $4000 or $5000 flight. While it's no problem combining bonuses from multiple AS cards with miles from AS flights, miles from AS dining, miles from AS shopping, etc, etc, until you get to a longhaul business (or first) class redemption amount of AS miles.

Generally, business class flights can be 4x or 5x or even more the cost of economy class flights in cash (and thus in cash-equivalent points from cards like Merrill+), but they tend to be only 2x or 2.5x, maybe 3x, the cost of economy class flights in miles. So the comparison between paying cash and using miles that works for economy class may not work for business class.