I also have been using the $50 Hilton credit for gift cards in the past. Now I have enough to book room(s) I can actually use. Just because someone's use of a card or travel patterns are different from yours doesn't make it wrong nor a "personal ATM" since an ATM dispenses cash and a Hilton gift card is hardly cash. Hilton still wins as Hilton still gets the $50.

In the end there is no significant difference between stacking up Hilton gift cards to pay for a stay (or meal or whatever other spend at a Hilton property). Either way Hilton gets the money and AMEX gives you the credit.

You could further argue the credit is designed to increase spend with the brand. Whether a hotel room or gift card both are increased spend with the brand. In exchange the card holder gets the benefit of a discount.