I also recently made a thread about how these aren't loyalty programs any more, rather they are merely an after the fact rebate for artificially high prices.

Miles are simply not bulk discounts (which I also thought as a potential comparison) because like rewards cards, if you buy 1 or 100 flights, you'll roughly get 1-2% back in the form of awards. So essentially it's just a way of disguising the "true" slightly cheaper price with a bunch of steps in between, and hoping a lot of people wont bother with the rebate. Status on the other hand could be in a sense, but at the same time unless you jump levels, the value you get is worse the more you fly. ie someone flying 100k gets twice as good a % discount per mile flown, than someone flying 200k.

Now where problems arise is clever people at FT and other places realize the arbitrage that can tke place, by getting 160k miles with $3000 worth of flights at 2 cpm, then redeeming for a mRTW in J valued at $20k.