B6 is trying to solve the perennial carry-on bag issue by banning Blue Basic customers from using the overhead bins and then guaranteeing Blue and Blue Extra customers space in the overhead.
AA, DL, and UA (when UA finally gets around to it) are solving the issue by putting in overhead bins that hold one roll-aboard per seat on the plane. That's a bit tougher for jetBlue with the E190s that have narrow fuselages, they have never refit, and want to replace with A220s.
Wearing my businessperson hat, I think basic economy actually did work quite well to extract more money from people -- it's really tough to live out of a backpack that fits under the seat in front of you for more than a few days, and that leads to a decent number of people buying up to Main Cabin. Some people will live out of a backpack but don't want to be stuck in a middle seat. The fact that AA is currently not selling many domestic BE fares is puzzling, but I have to think that it is related to the elimination of change fees. I think a permanent elimination of BE would end up like More Legroom Throughout Coach -- folks will not pay enough of a premium to fly AA.
Anyways, to stay on the topic of the B6/AA alliance: I think jetBlue will provide the carry-on benefit to AA elites on Blue Basic fares. There are enough restrictions (no seat selection, limited refunds, not elite qualifying) that most AA elites will book Blue fares. Lounge access when flying B6 to London is also a possible elite benefit that I forgot about, but given that AA had to exclude B6 transatlantic flights from mileage earning, that's a bit more iffy.
I personally think B6 will eventually end up dropping the carryon restriction for Basic fares or scale basic fares back to select markets with heavy ULCC competition . Their network has too much overlap with DL/AA for this to work and they don't have the scale of UA to be able to forge their own way. I have been booking DL over B6 despite being an AA elite for this very reason - DL has been cheaper even before the bag considerations.
As for the Embraer issue, DL/AA have tons of E175's with similar overheads and manage to make it work.