Cessnapete,
The SO role is probably easier to justify in this part of the world than most. Other than a few exceptions on one fleet, every wide body is going to be operating with an augmented crew so why pay for a third or fourth FO when an SO will do.
I agree that seniority pay generally makes sence, I remeber the idea being mooted some years ago in the lower echelons of one carrier I was involved with, but the counter argument at the time was that all the large pay steps over the decades had a occured when new and larger types had arrived. Im sure that was party attributed to being the 'good old days' but there was little appetite for change going foward. Anecdotaly, most of the senior guys where happier with long haul life anyway and I doubt many would have embraced the multi sector short haul life even if the base pay was the same.
Im sure it would work for the company, but as inefficent as it is in its current form I think it still works for the majority of the current pilot group most of the time.