Originally Posted by jordyn

This line of reasoning only makes sense if:

1) AA is selling out first--if not, there may be people who would fly them who aren't at the moment because of their non-breakfast. They're obviously not selling out first since OP got upgraded, and
2) People make isolated, stand-along decisions about which airline to fly on a flight-by-flight basis. And of course this isn't true either. Each flight shapes a customer's overall perception of the carrier which feeds into future decisions about which airline to fly. If someone doesn't buy an $8K long-haul business ticket because they had a crappy ORD->RDU flight, this turns out to be a pretty horrible optimization by AA.