Correct, and the reason people opt for priority boarding is not so they can get a seat, or sit in the cramped confines of cattle-class for an extra 30 minutes whilst everyone else boards, but to ensure they can find a space in the bins to put their luggage.
The whole luggage situation is a joke and it is the part of flying that I hate the most.
Options are to pay a premium to get baggage in the hold where there is fair chance it will get trashed or robbed, pay a premium to get boarded early so you can find an empty bin within eye-shot of your seat or get onboard and take your chances in finding one at all.
Whichever route you take it is either £££ for the airline or aggravation for you and the cabin crew.
Oh, and Edmund, your maths are out a tad. Weekly flyer with 1% loss will expect to lose their gear once every two years ;-) That said, it is still unacceptable.