The last time I flew PE I deliberately chose Virgin over BA, entirely due to the fact that Virgin offers free seat selection. As it turned out, the Virgin experience was so much better than BA [friendlier crew, better food, more comfortable seats] that I would now make Virgin my first choice, given a choice between the two airlines.
I think charging for seat selection, especially for Business Class, is a prime example of accountants running the company, as alienation of the biggest profit earners does not seem to have been 'costed in' to the decision.