Your basic premise is fallacious. Business class does NOT "normally" cost thousands of dollars. People paying thousands of dollars for business-class seats are more the exception than the rule. Relatively few full-fare business-class tickets are sold by any airline. Most people sitting in the front cabin(s) are on upgrades or employees. Reserving those seats for the most frequent flyers makes as much sense as anything else; someone has to sit there, and there aren't enough paying customers to go around!

Bruce