I did a secondment in BA Customer Relations. You probably will find that in a downgrade situation, that this is the standard compensation you are entitled to. BA will not compensate for outsourcing the flight.
I advise that you write a simple, non-emotional letter stating the card number and status of each person travelling and address it to Willie Walsh. That way, your letter will be sent to Waterside and not to India or Newcastle. It will be read by senior staff who operate directly for the Leadership Team and will hopefully READ your letter.
In the letter mention that it is the MILES that you want and not vouchers. The actual cash value of miles is suprisingly very little and a simple transaction for them. If they want to protect your relationship with the airline, they should be able to do this as a 'goodwill gesture', particularly as you have chosen to fly with Swiss in the future.
As for the redeeming the voucers, I cannot remember if there is a telephone fee involved. Knowing BA, there probably IS a charge, which I think is pretty lame. Perhaps that is something you can mention in your letter as well. Good luck with it all.
JSL, I recommend you call the CSD hotline.