Longer term this is an issue, but when there are a fixed number of D1 and PS seats on a flight, if a customer buys PS instead of D1, the fare difference is much more than the cost of one additional person's D1 F&B, lounge visit (if not eligible otherwise), blanket/pillow, and amenity kit. In fact, the fare difference is close to pure profit (or pure lack of loss) if a NRSA takes the D1 seat and consumes F&B, etc., which is probably already ordered and loaded for the flight. Airlines want to attract/convince passengers to buy PE rather than coach, not PE rather than business class.

OTOH, for major full service carriers operating major longhaul international routes, prestige requires that at least business class be offered. It might be smart to convert some D1 seats to PS, but DL can't totally eliminate D1 on most of its international routes (although some of the KEF flights seem to be a bit of an experiment in this direction). It also doesn't make sense to offer just a very few D1 seats, like a row or two as some carriers are currently doing for IFC.