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The customer pays for service, then the service provider gives back 50% of the customer's payment via Spark? Huh? Isn't that a 50% off deal with extra steps?

Good question. You could think of it that way, sure, but you are given a appreciating (sometimes depreciating) asset that can be used as a means of transfer or automatic savings. A straight 50% discount would just keep you in fiat. There are also plans to earn outside of cashback rewards.

I should mention that it just feels good to see payments hit your wallet psychologically :)

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Why keep me in fiat? Do you mean to say you are not accepting sats?

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Correct. Apple has certain rules against paying for subscriptions with crypto which I will have to clarify. A possible alternative would be purchasing a gift card with btc and redeeming in-app.