BA are an extremely good hotel agent, the service from BAH has always been excellent. It may be that FF are not the target market, rather people who would ordinarily use a different package holiday provider, only go away once or twice a year but would like a little added extra that others can't provide. One only has to see the adverts last year providing lounge access by a holiday company ( I forget which) to realise there is a market, importantly for BA, although the clientele, though earning TP and Avios would be unlikely to be in a position to use them due to their travel habits, however, BA get the valuable data they need.
I think that FF who are unwilling or unable to pay substantial amounts of money for "status" need to realise it is not about us.