"but I know what I DO see in Atlantic City. I see rows and rows of slot machines on some properties that don't have anyone playing them."

Like i said slot saturation is the key.
SS machines would mean increased revenue if the machines are idle.

"I also think that the policy of turning in 20 $10 strikes for a $200 strike as The Palms offers is a money-maker for the house too and keeps the players happy."

Yes and no.
Not only the changing of the SS but the subject matter on the SS keeps them busy.

It also leaves a large amount of $10 strikes to be sent back for melting. Like I mentioned, SS machines are a real pain at times.