dtremit,
You're right to a degree - fare class could be a rough proxy for margin or profitability. Fare classes are something that I don't get involved with but only read about. On monopoly/short-haul routes are there different fare classes offered or do the same fare classes just provide a larger margin or neither? If the first is used so that a given fare class provides the same margin for any flight it would work, but if the latter fare class become less of an indicator of margin. The legacy carriers certainly have enough fare classes (presumably just the way the industry developed) but WN somehow finds a way to be profitable (35-40 years straight) with only 4 fare classes if one disregards sale/introductory fares.
As you know, quite a few non-U.S. carriers give reduced/no miles for lower fare classes. Presumably that's to provide a rough correlation between fare class and margin. And presumably FFs that frequent those carriers have adapted to the loosely margin-based rewarding for flights. It could be a difference in corporate culture where companies outside the U.S. allow their people to purchase higher fare classes.
Jim