One airline's policy does not equal "supply and demand". Right now, American can unilaterally set new award levels any way they want, and for any reason they want -- which may or may not include "supply and demand". And they can do it with impunity.

My Ralph's example was flawed -- I should have given the hypothetical Grocery Points a fixed reward value -- 5000 cartons of eggs, say. That would more closely parallel an airline FF program, which promises a specific benefit productrather than a dollar value to be used against a list of awards. FF miles aren't like that because their value is defined only by the airline's redemption schedule. If, instead of miles, they gave you scrip in dollars usable against actual market-set ticket prices, that might be another story. As Watchful points out, any argument that airlines need to raise the cost of awards periodically due to inflation is specious: it's already accounted for because awards are earned for miles flown, not dollars spent.