Simply put, AS being in full OW would mean AS elites would be exempt from paying for luggage and so on as OW Sapphires and Emeralds. It reduces the appeal of AAdvantage for USA-based customers to have a domestic program offering that AND a non-zero amount of domestic service. Airlines usually don’t kneecap their own programs and ancillary revenue.

It’s not 2004 and CO, NW, HP and US are all out of business now as separate airlines. There is little incentive to be nice when you have four major airlines, plus two regionals, as opposed to eight or nine regional players. And ancillary revenue is huge in ways it wasn’t back then.