Beamer,
True, but in order to make money the company needs to get it from the pax. Yes you can reduce overheads but part of the "budget" airline model is that someone might be paying peanuts whilst the person in the next seat is paying full fare.
Generally the price of seats on frilly airlines has come down to make them comparable with LOCO operators. Now the only difference is the terms and conditions hidden in the small print under which the seat is booked, not the price. Unfortunately it isn't always made abundantly clear when a customer buys a ticket.