I've been a passenger on 591 flights in 12 years; 99% of which have been with Lufthansa. Only on 4 occasions has my luggage failed to turn up on time, but it has always appeared within a day. So I would say that 'leakage' is less of a problem than the inconvenience of delayed luggage - or waiting at the carousel, perhaps?
Only once did my case seem to have been interfered with - lock broken and contents disturbed, but nothing missing. Or 'extra'...
Normal airlines charge irrespective of whether you use your hold allowance or not. Before the current paranoia, I would often use a 'cabin legal' weekend case, but no longer as there'd bound to be something in it which the security people didn't like. But if LoCos charge 'extra' for use of the hold, obviously people will try to manage with overweight luggage squeezed into overhead bins - which becomes dangerous in turbulence.
One of Ryanair's better ideas is their 'approved' cabin bag - it looks quite smart and doesn't break any rules. Unless, that is, it is overweight.
The sadly-missed buzz had one flaw - the size of cabin baggage which they would allow was much smaller than the 'total of 115cm' industry norm. Far smaller than Ryanair or EasyJet were permitting at the time. So they carried quite a lot of hold luggage, which slowed turnround times and limited their scheduling. Ryanair use the same size limits as Lufthansa, but their weight allowance is 10kg rather than the 8kg permitted by Lufthansa. They also require
everything (including duty free shop purchases, handbags, cameras etc) to be carried in one item of cabin baggage. Whereas legacy carriers normally allow some small extras, such as duty free shop purchases, coats, cameras in addition.
Also, the seat pitch on Lufthansa is 32" in Economy and on ba it is 31". Whereas it is 30" on Ryanair aircraft and only 29" on EasyJet - so the opportunity for stowing 'heavy or bulky items' under the seat in front is probably less than it is on legacy carriers. Hence the risk from injury caused by overweight luggage bursting out of overhead lockers is inherently higher on LoCos than on legacy carriers.