People who you know are traveling a lot, and who you know are spending a premium to stay loyal to a single airline and reach elite status, also seem like the sort of people who are more likely to be willing to spend a premium to guaranty a seat up in business or first class.

From my fare searches and reading on the topic, it seems like discount domestic first class seats are 3x to 5x the price of the cheapest discount domestic economy ticket you can buy. For a person with no elite status, it makes sense that you would try to price it this high. The 1st class seat takes up twice the floorspace in the plane, there's a higher level of service in the cabin, plus it comes with extras: 1st class check-in, included checked bags, priority baggage, priority security, priority boarding, lounge access, etc.

But for a United 1K (or equivalent elite level), they already get all those extras regardless of what ticket they're flying on, PLUS they have an ~80% chance of getting a free upgrade to 1st, PLUS they can put in for a companion to be upgraded with them.

So how often does it make sense for a 1K to pay 3x to 5x as much for his guaranteed 1st class ticket when he has a great chance of being upgraded anyway, and gets a lot of the benefits of a 1st class ticket even if he isn't upgraded?

Wouldn't airlines be able to increase their overall revenue if they gave their highest elite frequent flyers enough of a discount on 1st class to make it worth their while? Considering that many of these people are the rare sort who would be willing to pay a premium for premium seats anyway?