That's one free round trip international flight per year in a lot of cases. Plus sometimes other benefits like theft insurance, warranty extension, phone insurance, etc.
You're subsidizing everyone else if you're not trying to get the best loyalty program.
Welcome to capitalism. Do you refuse to buy items on sale at the grocery store because they are subsidized by the more premium items? Do you refuse to buy the rotisserie chicken because it’s a loss-leader priced to get you into the door?
You’re taking a 2%+ loss on every purchase if you’re not playing the game. But you better carry debit cards and cash because some vendors charge extra for credit cards, and some charge extra for using cards at all!
You're subsidizing everyone else if you're not trying to get the best loyalty program.