For goodness sake, just because you have to pay for a bag doesn't really mean the industry is going downhill fast. Some people are still stuck in the old traditional ways... the industry is revolutionising.
I've always thought that extra charges for checked-in bags is a fair structure. The people who are costing the airline more to transport them by adding extra weight to the aircraft (so increasinf fuel use and cost) and increasing the risk of delays get charged more.
It encourages people to be more respinsible travellers. The people who travel more responsibly, eg. by avoiding checked-in bags when they are only travelling for a short time, being more cost, time and environmentally efficient are rewarded with a lower fare.