Buybacks tend to help current top management when it receives compensation from stock options. By "returning" capital via buybacks the stock price increases, when doing so via dividends, the price declines.
Until the Bush administration dividends were taxed at ordinary rates while capital gains were taxed at a lower rate, so there was some reason to do buybacks. However, as you note, almost always investors would prefer cash in hand via a dividend.
I generally view buybacks as fairly self serving.
Preferred stock is basically just an unsecured loan.
The reason to do buybacks is as I noted the potential to defer taxes . . .
And as I noted after a buyback, one can simulate a dividend by selling a proportional amount of stock...
Also theoretically (only in theory, in practice it doesn't work out this way) buybacks shouldn't raise the price because the company is spending a proportional amount of value, reducing the equity of the company proportionally to the number of shares it bought back. Unless people sold proportionally, to simulate a dividend, in which case the price would go down.
Same thing for dividends, if people reinvested dividends.
Although point taken about the options.
And preferred stock is different from unsecured lending for a variety of reasons, the primary of which is that it isn't unsecured.
You need to remember the NPV of cash today, even if taxed, is still worth more then the NPV of cash years from today, still taxed. An investors income from a stock is going to be taxed regardless, it is just a matter of when, but in both scenarios the profits will be taxed when the investment is turned into cash.