Qantas gave some of their leisure routes in Australia to their low cost off shoot Jetstar, some of the passengers were upset at having to fly low cost when they were prepared to pay for full service, however there weren't enough of them to justify retaining QF on the route who had to get their prices down or lose out to the competition.
QF codeshares with J* on some routes and their passengers get a meal, blanket and baggage allowance together with the FF miles even though the operation is low cost, if they've booked it as a QF flight number.
Air travel these days is a cheap as its ever been when calculated in number of weeks pay to ticket price. If you took the same number of weeks pay as it cost in the 1960s to fly London - Sydney return economy, at todays prices you could do the journey in business class and have change.
Choice today is greater than ever, with premium economy and business class slotting in the middle between economy and first. On most routes I have a reasonable number of options depending on how much I'm prepared to pay, on a short sector I can't justify paying twice as much just for a cup of tea and a sandwich.
On longer flights, daytime travel on a decent airline, perhaps with a short connection in the middle to stretch the legs, and paying for a preferred seat is an acceptable alternative to a premium cabin.
For my summer holidays I bought two return economy tickets for $2000, P/E would have been $5000 and business $10 000. The difference in price will nearly cover accommodation and car hire for ten days.