Sure, in the same sense that merchants pass on all costs in the form of higher prices.

That being said, if you play it right you can actually make far more in rewards than the merchants paid. There's a whole subculture devoted to it: I routinely earn around 4-5% back, to the point that I prefer to pay my taxes via credit card even with the surcharge.

What a perverted system of middlemen who provide no value to the economy.

Yea! Except for providing seamless global payments, distributed credit provisioning, fraud protection, rewards, travel benefits, purchase insurance, what have credit cards ever done for the economy?!