This is O'leary's and his like's legacy to the air passenger; aircraft flying around with empty holds (to which the ground handler still has to come to even if there's only 1 bag in it) while the cabin resembles Asda on 'Black Friday'. It's a scene of frustrated passengers, stress levels rising, trying to squeeze their oversized and overweight bags (which should be in the hold) into any available orifice while the poor cabin crew trying to impose some form of order.
At first, allocated seating bit the dust in the name of egalitarianism (read free-for-all and survival of the fittest). One line of code in the booking system was all that was required to bring it back and look at how well it works (again).
Having said that, have you noticed how the locos have conditioned passenger behavior. Even with allocated seats passengers (even BA passengers who never had to endure the stampede to the aircraft steps) stand in a queue at the gate for 30mins plus before the flight is even called.
Why? Because they know that there will be an ensuing fight for overhead locker space.
The revival of allocated seating can happen for hold luggage. There will always be a need for those in a hurry to get through the airport as quickly as possible hence a need for sensibly sized and weighted carry-on but I'd suggest that for the majority, the option to put bags in the hold, free of charge, should be reintroduced and the first airline, particularly a loco, that does this will reap rewards.
There are no really cheap fares these days and a pound or two on a fare (which is an unknown variable in any case) would help alleviate the problem.