I liked this:
Moreover, although a ticket may be worth several hundred dollars to a passenger, the marginal cost to the airline of giving away empty seats is estimated at around $25 for a roundtrip on an American domestic flight, to cover the cost of fuel, ticketing and food. If the airline had previously sold all 25,000 miles redeemed for that ticket to a credit-card firm, it could have earned up to $400. Even allowing for some revenue loss from passengers who might otherwise have paid, the industry's total costs for giving away free seats are probably not much more than $1 billion—a fraction of the $10 billion revenue. No wonder sceptics argue that frequent-flyer miles now reward airlines more than passengers.
Also the mention that airlines are as addicted to selling miles for non-flight activity as some people are to collecting them.
I think it's that factor that pushes the situation beyond the normal "inflation" argument. The system would be far more sustainable without repeated devaluations if nearly all miles still had to be earned by flying. (Also liked how the article pointed out that various changes were forms of devaluation - some reporters get so sucked in by airline PR that they forget to mention that).
I didn't see the topic mentioned per se in the article, but would stick by my own prediction: Things will really worsen, tipping-point style, when the baby boomers start to retire. When people who traveled and collected miles for a lot of their careers but didn't have much vacation time to redeem start to want to travel more in post-retirement years (or otherwise spend what are high 6-figure or 7-figure mile balances), that'll really accelerate devaluation pressures. Airlines won't be ready with seats and will try to blame anyone but themselves (fuel costs?), and programs and their ability to motivate people will take a bruising, rolling hit as the conventional wisdom catches up to the reality of redeeming. The first baby boomers hit 62 in 2008 and 65 in 2011.