Nice idea but I don't think it will work.
Like a lot of other people I am guilty of hitting the 'sort by fare price button' and buying the one at the top. I then feel a bit peeved at getting nothing more than a small bag of pretzels on a 3 and a half hour flight but I have to accept that it is all I have paid for.
I don't think that anyone can compete with a LoCo price whilst offering 'full quality' service (comparing average prices) and until pax start voting with their feet and head towards full service carriers (who can already still be cheaper than LoCo seats depending on where/when you book) then market forces will find their own level.