In the original attacks, one of the concessions the airlines asked for and got was a release of liability for responsibility for the damages caused to the Pentagon and the Trade Center. This was part of the airline bailout provisions.
The airlines were released on the theory that if they were held liable for the damages caused in the attacks, they would be bankrupt, and subsequently there would be no airlines left. Part of this bailout was the federalization of Argenbright and the creation of TSA.
Great deal for the airlines: They (and their insurance carriers) escape responsibiilty for the damages from the attacks and they get to wash their hands of security in the future.
Not so great a deal for the traveling/taxpaying public, as we can all see the outcome of this knee jerk reaction. We have an ineffective, witch-hunting, ever broadening, checkpoint agency, intent not on securing passengers and airliners, but creating SSI which is neither sensitive nor secure and is questionable information, make work programs such as ID checkers, gate molesters, passenger x-ray machines and the like.
The airlines no longer care since it is no longer on their balance sheets, they do not have to carry liability insurance and their airplanes are full.
Remember, the airlines were in serious financial trouble before the 9/11 bailout. If they had not been bailed out, AAL/UAL would likely have filed for a reorganization (Chapter 11) not liquidation (Chapter 7) bankruptcy to escape creditors and continued flying. If they did liquidate, one thing is certain: travel demand exists and new carriers, probably cheaper, more efficient, more innovative would have sprung into existence.
To fix the problem:
1. restore tort liability to the airlines and their insurers.
2. make the airlines responsible for their own security and its costs.
3. defund the public screening portion of the TSA.
If the airlines see value in having the TSA/government do airport screening then they can decide to pool their resources and pay the government to do the work. Otherwise, they can choose alternatives, knowing that they are liable and accountable for the safety of their passengers and aircraft. I seriously doubt an airline accountant would recommend purchasing unproven "bodysnatcher" technology with undemonstrable benefits. Likewise, if the screening mechanism were not cost effective, the airlines could solve the problem by the simple technique of fireing/non-renewal of the contracts.
Do we need a TSA? Probably, we do. At least some incarnation of it. But do we need Thousands Standing Around? No. TSA should be a small 2000 sq foot office somewhere in Virginia analyzing information and developing strategies to recommend to the airlines and their regulators (DoT/FAA).
One thing I've learned about "government officials" is that they like big offices. So, to minimize the growth of a government agency and keep it truly mission focused, limit their space.