If you've got great credit, you get a high limit, slightly-less-astronomical rates, and all the rewards.
The cost of the rewards is (as I understand it) mainly carried by the transaction fees, spread out over all purchases everywhere. So you have pointless price increases for people who /don't/ use credit cards (like me) or have poor credit, and the benefits of that 'tax' going to users with good credit (ie, rich people). So, yeah, it's a wealth transfer to people with better credit.
There are relatively few businesses in the world that can rip someone off for a year, then allow them to pay a more reasonable fee in exchange for guaranteed business, and still have the consumer claim that the system “doesn’t feel punitive.” The whole thing is kind of brilliant.
By participating in the cashback scheme you're putting more people through that ordeal by means of higher fees.
The only way to win is not to play.
At that moment in my life, the risk on lending me money was high and therefore the product I could access was limited. There was little incentive for the bank to risk lending me money, so I needed to purchase my way into rebuilding my credit. As the risk in lending me money decreased, banks became incentivized to offer me lines of credit so the cash backs kicked in.
Rebuilding my credit has allowed me to access lower rates on my mortgage , investments loans and other financial tools that have greatly contributed to my quality of life. I would consider that to be the reward.
It's frankly a brilliant scam, and the fact that people don't think it's a scam is its most brilliant aspect.