Yes, this is the behavior documented upthread, and hat I'm seeing (yesterday, six years and 1200+ XP, today, eight years and 1200+ XP).
As for revenue-based, I can't speak to how loyalty programs make money, but I see four ways they create value:
1. Directly getting those involved to pay more than they otherwise would
2. Increasing market share (at the expense of competitors)
3. Enhancing brand reputation
4. Acting as a travel agency / selling miles
1-3 are hard to measure: I can put together some charts showing, for example, uptake in long haul premium economy vs economy tickets for passengers who pass from Explorer to Silver, but it's hard to quantify. Or how many elites based at fortress outstations who routinely fly routes better served by the home team. Or workplaces where the brand has influenced airline choice.
But selling miles, credit card spend, all that? Easy to measure: easy for some dolt with an MBA and a good family to understand. And, looking at the US, it's got to be tempting.
Plus, as a travel agency, the expenses are easy to quantify as well. Heck, you can make sure that your ticket recoups the cost of the privileged treatment, every time.
You just need to give up on the quality of your brand.
Edit: that last line is a bit of a non-sequitur. The travel agency aspect is central to all FF programs. But business units are constantly pushing growth, and the way FF travel agency units can push growth is by pointing out that 1-3 are fundamentally unquantifiable, and therefore will survive just as well in a revenue-based regime.
But in doing so, they ignore the fact that all but the wealthiest customers are constrained decision-makers, and if the behavior they're incentivizing falls outside of a group of customers' constraints (such as requiring purchases against company policy), they're effectively saying that group is not important to them.
And maybe it isn't. But don't expect their loyalty.
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