I don't think FF programs or deregulation has anything to do with the quality of service on the airlines. The airlines are businesses, and their objective is to make money.

With the a robust economy, many more people are flying now. The load factors are at an all-time high, so there is no incentive to offer better service. Casual flyers will try to find the lowest fare. Business flyers will usually pay a higher fare, as they usually do not have the opportunity to buy 21 days (or 14,7,...) in advance.

When there is more money to be made, and more competition, the service and amenities will increase. For example, look at transatlantic business class over the past ten years. Seating, meals, and entertainment have all been improved dramatically. The prices have also gone up about 60%.

When the economy falls off, the load factors will fall, prices will fall some, and the airlines will add leg room, better meals, ... to entice people to use their product.

Complaints from customers do not amount to much unless it affects the bottom line.

Except for maybe the Peanut fares.