Well, You would be surprised how contracting labor costs nowadays. See how the IBM's and Accentures of the world seemly keep making more and more profits each quarter, let's just say their hourly rates aren't necessarily decreasing because of the bad economy. At $150-$500/hr, that labor really adds up. Not to mention, the ongoing cost of possibly new labor to handle the reservation process. I am of course assuming Marriott is adding/supplementing any existing reservations system they already have (with the hotel side).
Certainly, millions have gone into software development, training and implementation- but if most of the owners convert, then the initial joining fee alone will approach a quarter of a billion dollars- that pay for a lot of upfront costs.
As for on-going costs- well, they already have a timeshare reservation system and cost in place, and presumably this will not be that much costlier to run. Their management fees already cover those reservation costs. That's why the $169 annual cost will likely be largely profit. Any increased cost because of housekeeping or wear and tear will be borne by the owners in the form of MF's, not by Marriott.
I think the new system, if designed as outlined, will turn a tidy multimillion dollar profit annually from that pesky $169 per owner fee which, while being an annoyance, will likely not be an impediment to most people and likely not discourage participation.
IF home resort priority is maintained and point values seem reasonable to most people, as well as several of questions already brought up, this may be a home run for Marriott. If it allows owners to use part of their week for points and part for a home resort reservation and allows borrowing/banking, it has the potential to have people clamoring to jump on the bandwagon. As always, the devil is in the details, and we will have to see the full program outline.
I can see a real benefit from combining possibly a lock-off and a 1 BR from different units or perhaps different years, combining points to get something bigger or better (or longer), and for premium property owners regaining value that they perceive as losing anytime they trade. I have met Ko'Olina owners, for example, who feel trapped returning yearly, because they feel gypped trading for an Orlando unit, for example, but would really enjoy going there. I have a friend who traded an Aruba Plat. Plus week for a Beachplace New Years week, loved the trip, but felt they were getting the short end of the stick. I know it is a matter of perception, and as far as I am concerned as long as you get what you want you've made a good trade, but others are frustrated if they feel they've traded down. Points, in essence, would be a currency, and higher value owners would get "change" from their purchases, rather than it being an all or none transaction.
Of course, the real test will be in valuations- and whether most people perceive them as being fair. And that's a toughie- because people tend to inflate the value of what they own.
How do you think timeshare buyers felt when prices dropped by 25% for the same timeshare condo they bought less than two weeks ago but it was too late to rescind the contract? 
That must have hurt a lot more yet. What about if you buy an expensive car and then a week later, it is offered at a big discount too or an expensive cruise? It all hurts when you are at the wrong place at the wrong time for buying a product. Does that mean that a business can never have a sale anymore because it will hurt a customer who bought just before the sale? No more computer or big screen TV discounts either or any other big item we buy on sale. Would you like that? Nevertheless, it still hurts a lot and you have a right to be upset.
I know that they should have done their due diligence during the time they were able to rescind the contract but the developers count on the fact that people do not do this while on vacation. I doubt if many people would convert today at a cost of $5,000 when the economy is so shaky.
