It's all about money and our unwillingness to part with it.
The generations that have grown up with the pick-n-pay method (LoCo / LCC) think nothing of this. It's only us that recall the 'full service carriers' that don't like it. In another 20 years or so, the new pricing model will have established itself even more than it has now.
Even in the boom days before the great crash, pax responded to the lowest ticket price and this recession is going to last for another five years - at least. If the carrier gets even 10% of people paying to reserve seats, then that's money they would not otherwise have had.
I am not unsympathetic to your point - but there ain't no going back. Whilst some of the middle eastern carriers will provide the old services, for us they are all long haul. The inter-European pricing model was changed irrevocably in 1992, when the EU deregulated the air industry in Europe, giving carriers from one EU country the right to operate scheduled services between other EU states. Here we are 19 years later with the changes about (I'd guess) 75% of the way through. That is, between how it was 20 years ago and how it will be in another 10.
I dare say someone will be able to tell us how much cheaper the relative price is these days than in 1992 and the concurrent increase in the cost of living. Every single business in the western world is fighting the same problems.
Lastly, loyalty? I would suggest that is none now. Holiday pax buy on price. Biz now tends to buy on price, via the discounts that don't get advertised. There is little point in being loyal. Price and convenience of schedule wins.