How so?

They aren't ever actually selling the F seat for $79-99. That's the up-charge on top of the fare already paid. And if the choice is between having it empty and making zero dollars or filling it and making $99 I'd say that both the short term and the long term benefit. The main way the long term fails is if it conditions customers to not buy F because it is so easy to do the buy-up. In this case, however, it seems to be that they're going for a market where folks would never buy it anyways so there's no conditioning. In fact it might be positive conditioning in that they think they might have a chance at F so they're willing to pay a bit more to fly CO.

This isn't going to have the folks who want to know they're in F for the flight buying the cheap seats and hoping for an upgrade unless it happens all the time. And it really doesn't on most routes.

I find it laughable that an elite who gets upgraded by EUA/UDU can claim that selling the F seats at a discount in some way makes the product less premium.