Whilst bean counters might like the revenue of baggage - the trend for large carry-ons started 25+ years before charging started in earnest.
Following the 1980s deregulation, carriers implemented Hub-and-Spoke. Many pax found that they made the Hub connection - but their bags did not. So they did the obvious thing and started carrying on ever more baggage.
Later, this was 'monetised' but only because the practise was already established. So the carriers did start this but not because of charging pax for baggage. History is all.