I would philosophically agree with your statement, but practically one of the major advantages US airlines see in retaining NAmerican-based frequent customers is the upgrade. Since "foreign" airlines are much more restrictive in their elite upgrading, they have decided to provide a paid quasi-upgrade incentive by creating an "in between" product, Premium Economy. This cabin is an attractive and at a reasonable cost, popular way of improving a long haul flight over basic economy, albeit without the full space and service extras of business.

For US airlines, the cost of providing a true PE cabin may not be as positive as giving away otherwise empty business class seats to its elite SWU upgraders (and others willing to fork out miles and copay cash). Thus supporting the CEO's statement with a rationale.

I am sure UA makes more profit selling W and upwards fares to its 1Ks who plan to use SWUs than it would from reconfiguring a fleet with fewer seats to create a true PE cabin. Similarly, its E+ section provides elites with a real benefit when/if upgrading is not possible. (And likely the same rationale used by AA when it decided to return this category of seat onto its fleet for those elites who don't succeed in upgrading...recognizing such upgrades are available from any fare, so AA doesn't benefit from the same fare premium UA does for its potential SWU upgrades.)

I recognize such upgrading debases the perceived value of premium cabins on US airlines, but the customer base is very different in other countries so the marketing response (PE cabins) is more appropriate in that context for these non-US airlines. And AFAIK carriers like EK have not adopted the PE approach and also have squeezed 10 across in their 777 economy cabins. So there are still major non-US carriers who are not jumping on the PE bandwagon.