That's first order thinking though.

The aim of a loyalty scheme is to shift spend one way or another to your own revenue streams. This is money people may or may not spend with you, where individuals bias their choices based on a perceived or real benefit.

If you're a high rolling corporate customer, you'll be making the direct spend anyway. There is no net gain to BA or IAG unless the new status provides increased spend. The "wake up airlines and smell the money" strategy is underpinned by the assumption that having gained higher status it will be valued enough to induce members to engage in opening their wallets to partners. The "BAC" strategy was to reward discretionary spend in the mid tier. Either is perfectly arguable as a strategy. In both cases though you need second order consequences - either the target segment is engaging with the ecosystem for option 1, or the mid tier obediently favour BA and premium tickets without needing you to put effort into a marketing nudge.

The fact that you could game this fairly easily at hobby levels of spend is largely irrelevant, because that was a very thin skim.