I am really struggling to follow the logic here.
Let me address the points in turn.
1. ' most of us don't make a direct transaction to buy the points for 1 cent. '
That's not what I was saying. What I was saying is that most of us pay for our points. There are almost no free options left to acquire points in Australia. If the ceiling (ie the max value) for a Qantas point becomes 1c/pt, then huge swathes of points purchasing opportunities no longer make sense. The most obvious one is Woolworths points conversions. But there are many others. Think about the Optus sign-up bonuses that people harvested in recent years. People were basically purchasing points for about 0.6c/pt. If the max value you can extract is 1c/pt, chasing opportunities like this become attractive to fewer and fewer people because you are converting fungible cash (the money you pay to acquire the points) into a locked currency where you're forced to fly on Qantas, which is more expensive than its competitors so in reality you're probably getting far less than 1c/pt in value.
2. ' The big points come from sign up bonuses.'
Correct. But you are still paying for points. There are no big sign-up bonuses that come without an annual fee. Those days are long gone. So you're buying points at a discount rate when you sign up for a credit card bonus. The purchase rate has been creeping up over the years as the annual fees get higher and higher. Once you get through the big five providers that still offer good bonuses for low annual fees (Amex, NAB, Westpac, ANZ & St George/BOM), you are purchasing points at quite a high rate. Take, for example, the Suncorp Clear Card: $178 annual fee for 40,000 points = 0.45c/pt. You have to also spend $4,500 to get the bonus. On the assumption that you pay a 1.5% credit card surcharge on half of that spend, that's an extra $33. That takes it to 0.47c/pt. That is only a 2x return on your investment of $211. And you're now locked into flying with Qantas, which as I said is more expensive than its competitors.
3. 'While we are at it, what happens in other markets is irrelevant'
Exactly. I was saying the US is not an applicable comparator.
4. 'I don't understand why you think this new scheme guarantees that the supply of Classic Rewards will remain unchanged. '
Because if they go away and your only option to redeem points is at 1c/pt, fewer people are going to bother collecting Qantas points. They'll simply use a debit card instead. They'll simply redeem Woolworths dollars instead. They'll simply go with the cheapest insurance provider instead of signing up for the overpriced Qantas product that gives them bonus points.
5. 'Most of us never see the premium seats as they get snapped up by WPs before they are visible to the rest of us.'
As I have already shown in previous replies to you in this thread, Qantas already release next to no award seats in premium cabins on premium long-haul routes. The only way to get them is through WP/P1 releases or winning the batch release lottery. You can't go lower than 0. I'm suggesting that they won't further restrict classic award availability further than it already is.
In short, Qantas will no longer be able to sell as many points to other businesses because other businesses won't want as many of them because fewer people will be incentivised to chase them. That is bad for Qantas Loyalty.
Edit: To put it another way, if the only way to redeem points for a J ticket SYD-LAX-SYD is to acquire 1.1million points, no one is going to go to the time & effort (that will take 10+ credit card sign-up bonuses) as well as the cost (it's going to cost $5,500 to acquire those points if they are bought, on average, at 0.5c/pt) to do that. The Qantas Frequent Flyer program would die a quick death.