tfung: it is all about competition and maketing. LH needs to be more attractiv (tarifs, ff-programs) to costumers connecting through Germany with LH instead of taking direct flights from other European countries to the rest of the world (outside Germany), or even more for people living outside Europe at all.

And on the other hand, inner-german-ff will, in average, often have inner-german domestic flights that add up a lot in 12 months, and they don't have too much of a choice of other airlines (probably the train is the biggest competition for some of those inner German flights).