The LCC business model relies very much on ancillaries - IIRC Wizz took 56% of their revenue from ancillaries in 2022 - and these include onboard sales. Once the costs of a flight are returned, anything you earn is margin, and crews are heavily incentivised with commission to sell as much as they can. The non-food items are often very high margin, and food margins are excellent. Ryanair is essentially the biggest and most profitable airline in Europe, and it certainly doesn't do in-flight sales for fun. BA not being configured that way in the 1980s or 1990s, it wouldn't have placed the same level of importance on selling.

As to value, we had a thread about someone paying €300 for a shirt recently. The fact that on-board sales are not frugal wins doesn't mean people won't overpay for branded products, and tobacco I think is quite cheap relative to shop prices (I don't smoke so pleased to be corrected on this). People on flights are often on holiday and relaxed about spending. I doubt you'd retire off the proceeds of a flight, but it's all incremental revenue and it does count.