I hate when people make statements like this. Just because Dan has a lot of points doesn't mean each individual point is worth less. 52.5k points is still 52.5k points.
Wrong.
Your analysis begs two questions: 1) Miles are the same as dollars (they are not) and 2) Dan sells miles (he does not).
If a person has 109K UA and he needs 1K more for an LH award those 1K miles are worth X. If a person has 2 MM miles, he will not buy an additional 1K for X. The number will be <X.
There is a diminishing value to points, and that value becomes correspondingly smaller the larger the balance one has.
(In fact, many people would argue there is a diminishing utility even to cold, hard $$$. e.g. One will work very hard for his first million, but will work less hard for his 1,000th million.)