For all Australia to Europe redemptions, we now fall into Zone 6 (given that the miles from all ports serviced by MH exceed 10000 one way - excepting IST but that isnt the most attractive destination compared to CDG / LHR which are serviced by the A380).. On a basic level, the return redemption goes from 120000 points (102K with the online discount) to 230000 (195K with online discount).
Given the financial difficulties and brand issues that MH are facing, it seems strange to discourage pax from travelling.
Whilst mileage redemption isnt a huge earner (compared to revenue tickets), they are still selling the points to card issuers. American Express, for example, only pay MH when I redeem miles. And now I will redeem a lot less (or with other carriers for the same price) meaning that they are losing a revenue stream. And the surcharges on redemption tickets are quite high (again, compared to other carriers). I dont imagine that i am the only person in this situation.
In short - MH was attractive because the amount of points required was lower than their competition. The product is not the same standard as their competitors, but that was a sacrifice worth making based on cost. Now, with pricing the same as other carriers, they will likely be further down the list.