Daedalus,
The kind of 'lunatics' who fly first class, are those to whom the cost is not important, They fly first and stay in the very best hotels as well, it isn't one or the other. Of course with BA you can buy club, and upgrade with miles to F. Some of the people I know who travel First, work hard for their money, and enjoy spending it in style
I believe part of the reason Concorde was so expensive, was down to a survey which BA did. They asked R (supersonic class) pax how much their flight cost, and most didn't know or heavily over estimated. So BA had a think (for about a second), and bumped the prices up to those over-estimated prices the pax already believed they were paying.
As regards only First class pax being responsible for airline profits, it is clearly nonsense. Of course, a large part of revenue comes from F pax, but why on earth would an airline have 200 odd economy seats per long haul flight, if they aren't profitable. Does anybody really believe that each economy pax seat is sold at a loss?? I thinketh not.
In addition, Virgin does not have first class. Upper class is regarded as a good business class (which it is).