But I could have flown JFK-LAX-SJC for $150, where the JFK-LAX leg alone is $300+. The pricing makes no sense. It costs them less to allow me to go direct as it opens up a seat on the SFO-BUR flight I'm now on.

So they charge considerably more for JFK-SFO than JFK-LAX-SJC and more for JFK-LAX than JFK-SFO-BUR. But the base ps routes are still used in the cheaper itineraries. So allowing me to swap one ps route for another just bypasses their crazy pricing scheme but saves them providing me a seat on a short route flight I don't really want.