This is the business model that cruises use. But.....

Cruises have casinos in which to spend money

Cruises sell excursions at the ports of calls

Cruises sell alcohol, lots of alcohol

They have gift shops

They have some food that is additional cost.

And you are stuck for several days.

The airlines have no revenue, or minimal, once you get on board.

So, while it makes since to fill the empty seat with at least some revenue, the initial replies are correct. The ultimate revenue would go down as people learned to adjust travel to the last minute. And except for the gotta get there today travelers, business travelers, they would lose revenue.

Hotels are similar to airlines. They will steeply discount but usually only only through blind agents like Priceline.

I fly WN a lot. They will often open up these available seats to reward travel at the last minute. They get to fill the seat and they get a reward off the books.