You can't really gouge if your competition isn't. If there's a $120 AA fare, then, problem solved.
It's not so much that AS set a high fare, it's that they didn't make any low-priced inventory available. The reason could be anything from a mistake to some algorithm thinking that this makes them more money overall (remember that their goal is not to fill every seat, but to make as much money as possible). Maybe they are right, and maybe not. If AA has lots of $120 inventory available then I'm thinking that AS probably messed up, but, who knows. Maybe AA messed up. Maybe they are going to sell all those cheap tickets and in January there are going to be a bunch of people looking for tickets and willing to pay the full fare Y, and they are going to lose out on $450 fares because they sold a bunch of $120 fares in December and their plane is full.