"No snowflake in an avalanche ever feels responsible." - Stanisław Jerzy Lec

There's also the signal to the market that this flight is in demand. If you're only on the flight for points, (not the utility of the actual flight) then you're making a purchase without it actually being in demand. How this plays out - the airline seeing demand and adding another plane, or having more passengers so they can drop their rate to cover marginal costs and encourage even more passengers... I don't know. No judgement, just saying there's more to it than the jet fuel.

Plus on the redemption side, award tickets are almost exclusively "unsold inventory" -- a strict market signal that if a lot of people are redeeming and not paying, that flight should be either switched to a smaller aircraft of scrapped entirely. From that perspective, flying almost exclusively on frequent flier miles might be the most environmentally friendly way to fly ;)