You are absolutely correct and if enough frequent travellers like me say I will only stay at a Marriott if I have to - then they will lose money. They can decide how to run their business and I can decide where to take mine. It (should be) a free country.
Yes, it seems to me that if it is a bad business decision on Marriott's part, well, it's their business and they will suffer the costs and eventually cease the program.
And if it works out well on the bottom line for Marriott, then it seems to me that the market has spoken also.