I think you answered your own question. BT, just as most other big companies, is all about maximising profit. An existing customer isn't 'valued more' because it's a hassle for them to get a cheaper price than retentions can offer, either by moving to another provider or ceasing and reproviding as you suggested. Thus, this hassle is reflected in the higher prices they (feel they can) offer.
From personal experience, retentions never give out rewards cards, as it simply isn't an option available to anyone lower than the press office or executive office.
That said, there does appear to be some kind of hierarchy in the retentions. The first level retentions tend to offer cr*p deals like you stated, and you get put through to these when simply enquiring regarding renewal offers.
If you initiate the switch to another provider, BT will be notified and you will likely be contacted by the next level retentions. These can often give fairly good prices, as they know you are willing to make the effort to change provider and care about price.
If you have a serious complaint/issue or otherwise reach a manager, these tend to hold the absolute best deals available below the press office or executive office.
Personally, BT customer services are just as useless as most other mainstream providers' customer services, so I don't see why you should stay with them just because of "good service". If customer service isn't a big worry, consider shopping around for TalkTalk/PlusNet/Origin/Sky deals etc. - when combined with TopCashback or Quidco or specialised deals available through sites like MoneySavingExpert, you can often get access to loss-leader levels of pricing.
Zyxel VMG8924-B10A VDSL2 modem/router & dual-line AAISP/Sipgate SIP modem. AAISP Home::1 80/20 150GB + copper pair on TTB (by req). Sync: 79987/20000 kbit/s, attainable ~91-94000/31-32000 kbit/s via ~180m of 1985 copper to ECI Cabinet 14, Milford Exchange (WMMFD)
Wanadoo ~2Mb (Orange takeover) > Freedom2Surf ~4Mb (TalkTalk takeover) > Virgin Media 10->30->50->70Mb (unnecessary second line as work reqd BT) > BT Inf 2 80Mb (04/17 rises, no retention offer) > Virgin Media 100Mb (awful pings
) > AAISP 80Mb
Edited by pernickitypedant (Tue 01-Aug-17 21:14:37)