In other, similar programs, they try to obfuscate as much as possible. I presume your card issuer doesn't have a giant scoreboard that says how much money you've given them this year. (How much money they've given you, sure). Especially when you're running a commodity business -- and air travel is a commodity -- you want people focused on perceived value, not the aggregate cost.

There are two reasons to run a loyalty program with membership tiers. The first is that your competition does it. The second is that you're trying to encourage your members to make irrational value judgments -- you want them to value the points / status / etc. enough to pay you more for the same product than they'd pay somebody else.

Your "cash back rebate" program idea fails spectacularly at this. If anything, it allows people to make increasingly rational decisions. If it's all about money for the business, it's all about money for me too.

AA, DL, UA, and WN all give you miles based upon spending. UA's program is only different in terms of status qualification -- and, even then, it's not that different. While you focus on the cash value of upgrade certificates, remember that the vast majority of Premier flyers, on every airline, earn a total of zero such certificates.