In my opinion, if you want to judge this as fraud, you have to do it, at least in part, by looking at it through the lense of a regular passenger.
If a regular passenger who pays for each ticket individually did this, would they have a problem? Of course not. AA could only dream of such a passenger.
They abused people's generally poor financial reasoning to claim fraud uncontested. It's easy to get people to think of this as "free flights for life, poor airline abused" simply because the ticket was so massively undervalued compared to the use potential. In reality, each and every one of those seats were paid for, AA were just upset with themselves for the price they charged and fabricated a fraud claim to end it.
These are two different products, akin to a subscription service vs outright buying something, so the comparison isn't apt. You can return something to the big box store where you bought it if you don't use it. You're not entitled to that with the subscription service.
It's not a subscription, he outright prepaid for the rest of his entire life, for the service he was paying for individually. So similar is the product, that a separate system wasn't even designed for it and he'd still get stuff like airmiles per flight.
It was a prepay for the same product, not a subscription for a new one.
