If someone books a free Rewards ticket for a journey they would have made anyway then there is a cost in lost revenue for EC. It may be difficult to estimate exactly how much this lost revenue is, but a rewards ticket certainly isn't "free" for EC.
I don't think you can take a hypothetical "lost income" and try and argue that that is the "cost" of the scheme to East Coast. Given competition on much of the ECML, it really isn't as simple as that.
The income generated for each "free" first class ticket was approximately £50, based on a 10% retailer commission rate. For standard it was approximately £25.
The "free" tickets were roughly linked to the lowest Advance price tiers. For Newcastle to London this was £45 first class and £15 standard, for York to London it was £35/£14 and similar again for Leeds.
Therefore the "cost" of the ticket in lost revenue broadly matched the income generated through the scheme, on an individual basis. You should take into account the number of people who took rewards points and never had enough to cash them in, as they also brought in revenue. And that's if you work in terms of "lost" revenue; the marginal cost of the tickets will have been much lower again.
If
Clip is so adamant that East Coast lost money on the scheme, I'd be delighted to see his figures.
As for the value of rewards schemes generally, commercial retailers will generally offer the lowest reward they can without it impacting on sales. Clearly Stagecoach believe that people will continue to book and travel with them regardless of the value of the reward; the Nectar offer is clearly just a PR exercise rather than anything meaningful.
We're seeing this elsewhere too: BA have recently made their Avios scheme pretty much worthless for economy passengers, for instance.
It's for this reason that a petition is a waste of time and energy. The only way to make a company reconsider is through their revenue stream. And so long as people continue to travel with Stagecoach, they will not offer a different reward scheme. 800 signatories is barely enough people to fill a single MkIV train, it's irrelevant.