I think Delta has a legitimate right to try to separate real brand-loyalty behavior from low-price-chasing behavior which happens to result in revenue to DL.

The hard question that needs to be asked is whether it helps Delta to reward frequent leisure travelers who seek out the lowest fares, then happen to compile enough DL miles for status, for their "loyalty." If those individuals represent only marginal revenue (and a year's worth of their business wouldn't buy a one-way transatlantic BE ticket, in most cases), or if they're really price-driven rather than brand-driven and Medallion status is an indirect consequence of their behavior, then DL needs to look at refocusing on the customers who can actually restore the carrier to profitability.

They also want to get away from rewarding people who plot very-low-cost mileage runs, gain Medallion status, and then occupy F seats while a late-booking businessman on a full Y ticket has to sit in coach. Clearly Delta derives more benefit from rewarding the second guy.

As for the comment above about how leisure travelers will all move to WN and JetBlue if DL doesn't watch out... I think this is probably the unavoidable and natural trend anyway. DL, AA, and UA are going to be business airlines first and foremost. Leisure flyers who always chase the lowest ticket price regardless of brand aren't exactly unwelcome -- but they're not the focus, or the key to profits (see the BA model), and they shouldn't necessarily get loyalty rewards.

The industrywide problem now is all about low yield. Too little revenue per seat mile. First class seats are an incentive in very finite supply... and if DL can leverage them differently to improve yield, I think they should. Otherwise eventually there won't be an airline to fly on, in any class.