The idea is that you pay for your destination. You are not paying to eat, drink or watch a movie - you are paying to get from A to B. Aviation is for the most part transportation, not a cruise. If you want better service and are ready to pay for it - book First Class!
The public has voted with their wallets - they will take a lower fare over a complimentary meal service on a domestic flight any day. Personally, I see no problem with this. It's a reality of our much more globalized world - people need to get places and the actual transport is not such a big deal anymore, it's the destination that matters.
I've got to say though, I would pay around 20% more for the airline that offers a meal, a drink and a PTV!