Seat allocation would hurt Easy. The reason everyone gets to check-in and the gate early is to get the seat they want. It works well, and should be kept the way it is.
Down here in OZ, all of our LCC's (tiger, jetstar) have seat selection. Jetstar does it free, and tiger charge a small fee, but it is a great process.
Although people might not turn up early, we have 45min cutoff down over here, and if you miss this, you are put on the next flight plus a fee. What I also like is that on Jetstar International/Air Asia flights, you also have the option to chose your seat. It really does put the stress out of some people, and you can change your seat online anytime up to departure.
Certianly am suprised that Ryanair, Easyjet have not implemented such a thing. Certianly would boost revenue's