Points plus Pay allows you to burn your points at a ridiculously low rate of 0.65c per mile/point on any available revenue seat - this is at best around 27.5% of the price they charge you to top up your points. At these prices I doubt many people would be using it other than in small chunks to get rid of balances or generate some account activity and if you were looking to just burn miles you would need to be innumerate to use all your points for this. It's doubtful that QF generates much revenue from this avenue, but in any case airline revenue management is always a balance of selling their inventory of seats at different prices/fare buckets, so its pretty obvious WHY they may do this.
The new award category would have more restrictive inventory than the P+P and allow QF to release statements in future about listening to and giving FFs "more of what they want", releasing more premium awards and put a positive spin on charging higher prices for releasing more pure award seats, when in reality it is similar to Marie Antoinette's supposed quote of "Qu'ils mangent de la brioche" - when members complain about a lack of (mostly) premium cabin space availability, you release more but at a much higher price and tell everyone later that you have resolved the issue and listened to their needs. One of the other floated ideas is to charge more points for upgrades that will be confirmed earlier, so once again QFF appears to be listening to complaints and solving them by charging more.