You probably dug your grave a bit on the first point (and they do exist, or for a small amount more), but the second point does nail the coffin unwittingly, so you were probably hosed to start with.
Yep!
Again, people weigh up what the differential is and make a decision based on it.
There has been cases where a Business award ticket can cost the same (or even less) than a cash ticket, even after taxes. In many cases you hope it's just a few hundred dollars more. Once you get close to a grand in difference, unless it's the difference between Economy and First then most will start to reconsider, especially if the booking is for more than one person.
Remember, buying points for burning is mainly because of the lucrative value versus a cash premium ticket. But in the end, you're usually still left weighing up (at face value) an Economy ticket and a (now) cheaper premium ticket.
Absolutely and I agree and I have done exactly that.
If more people(perhaps not my friend) knew they could get business class circa $2-5k(or whatever) cheaper they'd probably wonder why this debate is happening but back to the thread and apologies if OT!