Definitely a backward step. Essentially now if you want a guaranteed aisle or window seat rather than the awful middle seat you'll have to pay extra. Was never a problem before. Previous system had flexibility. Why can't they just be a normal airline and let people choose their seats for free unless they want extra legroom which costs extra?
It's so disingenuous to say it's about service. It's about extra revenue. People will still rush to be on the plane because of overhead luggage space, as we'll all be travelling without hold baggage to keep costs down.