You pay X dollars for an item with your card.
Chase gives the merchant X-8% for the use of the card.
At the end of the year, Chase gives you 5% back, keeps the 3% difference and you think that you have cost THEM money?....................
Well actually I stick to 5% items 95% of the time, but regardless - I would still be paying X dollars no matter what payment I tendered. It never was my money. If you are arguing that ripping every credit card and debit card in the world would reduce prices, ok I guess I will concede that - but it sure would be inconvenient.