it is staggering just how many people are either unaware or ignorant of the word 'yield', and it's effect upon the business. People think full aircraft means a successful business and visa versa.
But generally a full aircraft, for the big locos' at any rate, does mean a successful business. I think Alex's point about load factors is fundamentally correct.
You mention yield management and then talk of selling 1p tickets - that is just the headline price. There will always be a percentage of seats sold late, at a high price. High load factors therefore means more expensive seats are sold, if an airline is any good at yield management in the first place.
Also high load factors means more ancillary revenue generated - I work for a loco and all our cabin crew have battered into them is spend-per-head targets. The big area of profit growth is what is sold on board, so the load factor is hugely important. I take your point that filling an aircraft with pax who have paid the square root of nothing for the seat is not a sustainable business plan, but a high load factor is still important. The cost of the seat in loco world is becoming secondary to the profits made through what is sold on board, for that you need bums on seats.