That is a huge downgrade for OW Elites flying on AA. Indeed it was one compensation for having to squeeze into 10-abreast 777 on TATL, as well as having comfortable domestic flights (and lets face it, domestic in the US can be positvely mid-haul by european standards.
Why the change? Surely airlines want to be capturing business at times like this. More perks to bring back frequent flyers not less, especially those that cost relatively little.