Yes it all seems to be about catering to different markets and different price sensitivities.

NZ used to sell PE seats as Y on TT/PI, with most designated as FF seats but some able to be selected as preferred Y seats for $20 more or so. Still Y meals etc. Think this was around the spaceseat era IIRC.

I always thought this was rather generous at the time for status pax, even more so now given that many are prepared to pay $200-$300 more for PE (and often more) for a short hop.