The legacy airlines are trying to reconcile four things simultaneously:

1. Using technology to redefine "loyalty" as incremental revenue over the basement fare - United is leading in this area with UGS, $299 annual access to E+, Mr. Chicken offers to upgrade at check-in, etc.
2. Rationalizing fare structures - America West and AirTran are dragging the majors kicking and screaming in this direction, look at the percentage of paid Z fares on routes such as JFK-LAX
3. Tailoring their market to their predominant customer bases even if it annoys some of their higher volume customers in the short run (United is the leader here, with ps/Ted/explus); and
4. Staying afloat.

I agree with DHAST that the FF programs are here to stay. The elite programs, however, are up for serious scrutiny. Delta and US have botched this in past years. United seems to have learned from their lessons and is taking a more incremental and less confrontational approach.

But if the market shakes itself out to the point where I can routinely pick up an $1800 transatlantic ticket in a class that looks like your typical 757 domestic F service with a 50 day advance purchase and capacity controls, then the days of earning elite status for a $299 ticket in row 68 are going to be gone. You'll still get some miles, but that'll be it.