Seems to me like a reasonably rational implementation of what MO'L on his side has been going on about for ages.
In principle I can see that if I have a checked bag it's more cost for the airline. If I anticipate bringing one, I can live with paying the pound extra, in exchange for the pound off when I'm travelling with only carry-on.
But the devil will be in the detail. It's one thing to say "sorry sir, your carry-on's a kilo too heavy, it'll have to go as checked baggage," but it'll be a bit tougher to say, "sorry sir, your carry-on's a kilo too heavy, it'll have to go as checked baggage, that'll be four quid, please."
