Personally I'm happy with Star. To address some of the points you raise:
1. All the differences and deviations between FFPs only serve to offer more variety and choice depending on what your requirements and flying patterns are. Of course, some programs simply make no sense, but amongst the major ones you can pick and choose the one that works best to your advantage.
For example, obviously you'd avoid LH and BD's program if you mainly flew discounted Y, but OTOH they are great if you fly mostly F because you can get 3x miles. I personally use AC Aeroplan because of the 35k *G qualifying criteria and reasonable earning levels in discounted Y, but those who fly mainly domestic US would probably be best served by UA MP. Etc etc.
If all Star programs were very similar in their characteristics it would make the whole FFP game a lot less attractive, IMHO because you will have to conform to whatever target market the FFP has overall. I can't imagine SQ would be ecstatic about offering free SWU in its own FFP, just as I can't imagine UA flyers being particularly keen on lack of upgrades a la SQ - which do you follow?
2. In the case of subpar airlines, I find it much easier to consider them initially as though they do not actually participate in the alliance. You used BD as your example - if I was going LON-EDI, I would probably choose train over flight because the fact that BD flies the route doesn't represent any benefits whatsoever.
Where you have no choice but to fly the subpar airlines, at least consider the fact that you would be getting
something in terms of miles and FFP benefits over what you would get otherwise, on a non-alliance carrier - nothing. For me, a marginal benefit is better than no benefit.
3. Market coverage (competition, no coverage etc) - it would be nice if they sat around a table and discussed which routes they should each fly and concentrate on, but realistically it's an alliance branching out of a marketing agreement, not joining them at the hips. Ultimately, they do not share the profits so they are on their own in terms of operating the most attractive markets and obtaining maximum revenue - this means some routes which are inherently unattractive will remain unserved, whereas obviously high-yield markets will attract competition even amongst member airlines. Unless Star becomes one huge carrier who shares all the profits, I don't think that route decisions will be swayed particularly by anything other than cold hard revenue.
4. Integration activities, the promise of seamless travel, etc - Agreed, more could be done. But already, I feel that activities such as moving all Star carriers to NRT T1 (except the traitor NZ
) (soon to be CDG and LHR too) all show a certain willingness to improve matters for passengers. Most of the inefficiencies originate from a time before Star was formed/enlarged, i.e. LAX TB whereas the most improvements are made in new airports and terminals, i.e. ICN SilverKris and the Star lounges at ZRH/NGO. Over time, I think it's safe to expect more improvements in the seamless travel promise, although (continuing from the previous point of all the airlines being independent of each other) integrating systems and procedures across different airlines is no easy task.
In addition, things like improved Electronic Ticketing capabilities across different carriers, as well as easy-to-access reward seat reservations (StarNet) are good examples of improving infrastructure to cover more airlines. I would personally say that although things aren't going at a rapid pace, overall things are improving, albeit slowly.
Perhaps I am sounding like a Star PR person (maybe they will give me a job?) but coupled with the fact that I had no particularly great expectations of Star anyway (other than cross-alliance *G benefits and reasonable ability to earn/redeem miles) I must say I am mostly happy with Star. Any comments?