I'm not sure I agree. The realty is that Delta made a smart decision here. These seats take up 38% more plane floor space than a regular Y seat, and 22% more floor space than a C+ seat.

Let's be clear - these premium economy seats are just that - premium economy. It's enough space that you no longer feel cramped and play elbows with your neighbor all day - and a bit of extra recline to help with sleep. Those are the differentiators. And it does make a big difference. There are probably enough cheap businesses that are willing to pay for that (but not for J), and enough personal travelers who will pay a small premium to travel with reasonable comfort.

With the worst of Economy already removed (no elbow room, rubbing up against seatmates, and no real recline), the willingness to pay for more than that is probably low - the marginal utility from two extra horizontal inches is just not that great.

Going from 8 seats to 7 seats means that you're now looking at a 60% premium relative to a Y seat just to break even. And if you want fancier catering? That's an added cost too. Is the willingness to pay really there for that extra 20-25% on top of the 40% premium? On a $1200 Y ticket, there is a big difference between a $500 and $700 upcharge.

I'd rather have a cheap 8 abreast option with extra legroom than a 7 abreast that I don't want to pay for.

One could argue Delta's "mistake" was making regular Y too comfortable on their 777s..