I think there's room for both.
QF could "reward" long term loyalty with extension of status either comp, or even by offering a challenge (eg: 200 SC in 90 days or something) or via points purchase.
QF's objective is to maintain the revenue flow, so offering status extension via spending of points makes sense, or by offering a challenge (hotels do this) also means revenue coming in. A comp, from their point of view, does not ensure future income (but having said that if status is not used by virtue of spend by either points or tickets) then the cost to QF is minimal.
I would think if a customer meets appropriate criteria then sure, extend via comp but for those that don't I see NO problem with offering a "paid" option or challenge - which is a win/win for the airline and more infrequent flyer.
Near the end of last year my status with a hotel chain was not even half that required to retain I though oh well I'll drop to what I earned... but they offered a challenge.. stay 3 more nights (rather than 20 or whatever I should have) and they'd extend. I grabbed that and stayed the nights. revenue for them and I kept the status. That's smart work by them IMHO and keeps me happy.
If QF had something like that (as this points thing seems to point to) then I think it makes business sense. With my extended hotel status I am more likely to book again with that chain this year to use that benefit... which I may not have done so much if I fell back in status.
Really this kind of stuff shows an evolution (not the other "E" word) in QF's CRM systems and extra ways to a) produce revenue, b) keep loyalty and c) reduce some FF liability all in one.