As someone who flies WN quite a bit (A-List) who sees full overhead bins all the time, I'm not sure if free checked bags would even matter--I think people just prefer to keep their bags with them if they can.
I'm the opposite. Who wants to haul their luggage around ATL? It's much easier to check it and have it waiting for you when you arrive. If there is a sky club at my destination I'll usually go have a drink there and then my bag is waiting at the baggage office. No standing around waiting or squeezing by others to grab my bag off the belt.