He is talking about earning miles and LP in the 10-15 / dollar spent range, which is really not that good given the number of LP that are needed for status. There are opportunities to earn at a 30-35/$ rate with premium economy fares on partner airlines (check the premium fare deals forum if you are interested in these)

I could see how it could be useful for people in some very specific situations but overall I think it's rarely a good deal. Also, I think hotel status is quite valuable (it easily saves me a few thousand dollars a year, even disregarding upgrades) so I would be hesitant to give up the qualifying nights.