I suspect there are 2 factors at play here. For one, serving the lowest common denominator and competing on price is easier. It's easier to create metrics around, and by handling volume, it's easier to fill planes. It would be harder to provide a premium service airline with all more-expensive seats, because likely they'd end up with unexpectedly low utilization or unexpectedly high demand at various times, based on seasonality, and it might be harder to fill all of the seats as efficiently. Not to mention route planning and so on.
The other factor is probably just a bit of a herd mentality where nobody wants to go out on a limb and try something different for fear of spectacular failure. We know the existing system works, even if it doesn't work well.
I know United has Premium Service, but they don't even make it easy to purchase. They mention that it's on EWR-LAX and EWR-SFO routes, but then tout the level of "available" service in different classes -- 1st, and economy plus. They imply there's ALSO regular economy seating, and don't explain what (if anything) is better in regular economy. They don't discuss whether Economy plus is better than economy plus on other planes/routes. They also don't seem to provide any way of booking it -- I looked several times on their website, and perhaps I just need to know which flights are considered "PS" flights, and then figure out if it costs more or the same?
