It certainly won't lead to improved benefits for folks who used to pay several thou for an F ticket that they now buy for $599. The margin for freebies just won't be there.

However, I think it also says something else. They're saying that precious few bought those tickets. F cabins are full of people upgraded with points, miles, upgrade credits, or just because they're elite - to say nothing of non-revs. The average revenue per F passenger probably wasn't all that high. For that matter, the average revenue per coach passenger was probably nowhere near full Y, either. They'll lose a bit off the top, because some folks actually did pay full fare for one reason or another, but for an average planeload the revenue drop may not be that big. If they can make it up with a few points of increased market share, they'll be ahead of the game.

If everyone matches DL they won't get more market share, but they won't lose much revenue. And it may increase travel at the margin. Consider the manager who has a last-minute meeting and it's a coin-toss to go or not. For $2K+ transcon, s/he might turn it down. For $500, it might be worth it.

I don't see the reasons for FF programs affected by this. They began in an era when everyone's fares were the same. If they're still about the same, at any price point, the reasons will still exist. Benefits might change, upgrades might be harder to come by if many people put down an extra $100 for paid F, but they'll still be here for us to talk about.