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.
Problem is - as in all markets, there is a "floor" to the scale of acceptable service, below which consumers will not buy, therefore driving service levels back up.
But in aviation, you go below that floor, you are extremely dead. Kind of a rough free market when the only way to find the lowest possible price is to start mort-ing people.....