Agreed, there has to be a noticable difference for the extra money. I fly a mixture of low cost and full service. When I fly full service my expectations are higher. If my hold baggage is a couple of kilos over I don't expect to be charged, I expect better on time performance, better seat pitch and a reasonable meal. If I'm not getting a better product, why pay a higher fare ?
When travelling low cost I expect to be charged for everything and plan around it, also I much more tolerant of small delays and less convenient times.
As long as I got what I paid for I'm happy. Having flown domestically in America, out of my own pocket I'd opt for low cost. Full service standards have come down so far it's not worth paying extra for.