That was 32 years ago. VS found that they launched at a very propitious time and could benefit by going upmarket during the boom of the 1980s. They were in the right place at the right time. Since then, they have had many Ups and Downs and now have a possible chance at another way to make money.
Very few companies start off selling cheap and stay that way throughout their existence - in any field of commerce. They need to make money and think this might work for them, given the remarkable changes in the airline world in those 30 years - not to mention the economic climate of the pax.