chornedsnorkack: ... but lack of frills in Economy can also encourage the passengers, especially those who want to fly the specific schedule and can afford it, to buy Business tickets instead. In which case the airline gains the difference between Economy and Business fare thanks to having bad Economy service.
I agree with PAXboy on this.
It is always possible that experience of bad economy service may push some pax into a premium class. But the number of pax that this applies to will be tiny. If you provide bad economy service, you are much more likely to drive pax to competing economy classes - including the low-fare competition, on those routes that have it.