Just a few comments:
Service: I found AirAsia service to be generally friendly, but they don't handle exceptions well. "No" is apparently the only answer they are allowed to give when anything goes wrong or is outside the rules...
Carry-on: your experience is typical - very often rules are not enforced and people bring everything but the kitchen sink. BUT rules are usually enforced at check-in and sometimes by AirAsia staff at security, so you might be sent back to the counter to check your back and pay high airport luggage fees. I wouldn't recommend trying this in KUL or some other airports.
Seats: yup, 29in pitch is very tight - same as most regional LCC...
FlyThru: yup, AirAsia sells flythru tickets - they are much more expensive than two back-to-back tickets, so you pay for the convenience - or take a risk if you don't. Both BKK/DMK are bad for transfers with different tickets (not only AirAsia)
i did not have this problem in KUL though - you can transfer without fly Thru at your own risk..
DMK: not sure when your flights were, but the airport has been (mostly) renovated and is far from a dump (now). New carpets, paint, lighting... there's even a very nice lounge... I've seen a lot worse around Asia...