Share buy back programmes are equivalent to dividends in all but tax treatment. Why should the market capitalization / valuation of the company factor into a decision to pay out to shareholders?

Because when you repurchase shares beneath its intrinsic value it's accretive to shareholder value.

Yes, but judging intrinsic value is something for investors to do. I want my companies to concentrate on what they are good at---and random companies are not good at playing the stock market. (See the other current discussion about Cooper Union (https://news.ycombinator.com/item?id=5599385).)