Yes, but some people are happy to pay more for a particular service.
I recently flew MUC-CPH-MUC with SAS on Business Class and that cost a whopping €1400,-. Surely that can't be competitive? On monkey class on that route, drinks are free when you fly LH but cost money when you fly SAS, and the former is ultrareliable which the latter isn't (strikes...). There's enough room for improvement if you look for it.