However, the specific name for the cohort of users who paid a very small percentage of their spend (including 0%) was indeed "deadbeat" (at least in the two data warehouses I helped build out), as I'm less profitable than others with less spend.
In fact, one issuer (Capital One) actually closed a card I regularly used (~$1000/year annual spend) about 2 years ago, the letter not stating reasons why. I actually called customer service, and they cited that the costs to maintain my account was considered too high. I used them for a specific category of transactions in which the rewards were higher than any other card I had. Though my usage was apparently insufficient to make it worthwhile keeping me as a customer.
As others have stated making money off of the merchants is part of their business model. At $1k/year I wouldn't be surprised if that puts you into negative territory.
No, the credit cards are making plenty of money off of you: probably on the order of $150 a month. From there it costs $.35 to bulk mail your bill, and $.25 to process your payment (including the cost of running the web site you pay it at). There is also your share of the advertising they do, and other overhead that I don't know how to place. Still their profit off of you is over $100/month!
I'm not entirely convinced that the person who maxes out their cards and pays interest is actually more profitable - a lot of them will end up defaulting in a few years and paying less than they actually put on the cards in interest. I can't be bothered to look up the numbers (if they are even available) to see if that is true or not.
Of course I made up the numbers above. They are ballpark (and somewhat variable), but they give you a picture of the truth: your are insanely profitable to them.