That's probably because at that time nobody thought it would be good business practice to charge for seat reservations. For a while it was a signature feature that differentiated full service airlines from LCCs.
I agree mostly with you. But oddly enough, SQ never had it for its coach cabin, not even for elites. And now that everyone penny pinches the pax, SQ introduced free seat assignment for all
.
Also our good ol'LH never had it intra Europe until they introduced a bogus seat allocation for SENs and HONs .. basically a guarantee to sit in a middle in the butt of the plane.
Now it seems there's not really any difference left between the two business models. So why pay more?..
Intra Europe? Nothing, hence the success of the LCCs. For anything else, the current legacies are quite useful still.