Originally Posted by
Widgets
Basic Economy is for price-elastic customers who would pick another airline if it were even $5 cheaper.
This.
I see E fares quite a bit on my routes, I assume because I'm based in ATL and fly to lots of places where WN, F9, and NK also have service.
There are many people who are unwilling to spend the extra $20 or whatever that OP is, as well as people who will accept any level of limited service to gain any cost savings. Same reason that Motel 6, Travelodge, etc. stay in business.
They're just other options for those who want them - nothing wrong with it. And if you think about it, folks with no status are losing fewer perks when buying an E fare, too, to the value difference is smaller. I do wish people would read the fare description more carefully...