Most pax would not change their flying habits for the sake of miles. Most pax do not collect miles, don't fly very often and just look for the cheapest fares possible. To cater for these people, airlines have found ways to make their fares look cheaper than they really are, and adding on extra costs for fuel, baggage, payment, etc. There is little point in thse people collecting miles anyway as they'd probably never have enough miles to make a redemption worthwhile.

But some people are persuadable by miles. I expect these people would typically either be business travellers whose tickets are paid for by somebody else, or who are pretty wealthy. Now, if you can persuade these people to fly on your airline when cheaper choices are available - or to pay more for a ticket on your airline than they had to - then you'd want to help them do that. Miles and status redeem themselves by filling empty seats and by letting people sit in a comfy lounge and have free coffee and free whisky. The marginal cost of having a passenger in an otherwise empty seat - even in F - must be quite small. And the prospect of being able to fly in international first class for free - even if it takes three years of hard slog to get there - is a pretty tempting prize for an average miles-whore. That's the kind of prize that will have people paying extra for tickets, flying when they didn't need to fly, and coming back to your airline.