most people that fly with their jobs because it can give you a "free" vacation flight fairly often.

Depends, the free bags, the upgrades, everything else on it can be worth it if you travel or fly enough, but obviously a lot of people don't think about it and are just spending extra for something they can't fully utilize.

The airlines do fine; they sell miles/points to banks who actually have money. Almost all US carriers are worth little or negative but their rewards programs have large valuations.

If you pay your bills in full and don't pay interest you are beating the system, and it is "OMG free flights"/hotels/cash. You do give away tons of purchase info but you're giving that away anyway unless you're using cash.