It's pretty simple:
1. If the price of the flight is worth the $$ to me I pay for it.
2. If the price is more than I'm willing to pay, I don't go.
3. If not going is not an option, then I use miles.
Three scenarios as examples:
1. I want to go from DFW to SFO for the weekend. The ticket is $300. I buy it and go. The ticket is $500, I don't go.
2. I must go DFW to EWR tomorrow. The ticket is $1800. I use miles.
3. I'm going to europe. I'm tired of flying coach. I'm not going to pay $2500 for a business class ticket (one way) so I use miles to upgrade.