I'm only minimally familiar with contract law.

However, every major airline prohibits "hidden-city" ticketing in their Contract of Carriage. If the airlines are seeking damages that are beyond what the law allows, I'm pretty sure that someone would have sued them over it and won by now. Think of all of the huge corporate customers that could save big money if hidden-city ticketing were allowed.

Anyway, if a customer was naive about the terms of the ticket when she bought it (and didn't realize that hidden-city ticketing was a violation of the rules), I'd be sympathetic if the airline tried to punish her for a hidden-city ticket.

However, nearly everyone who reads FlyerTalk knows that hidden-city ticketing is a violation of the rules. When an experienced traveler buys a ticket, she understands the terms of the ticket and the fact that hidden-city ticketing is not allowed. Regardless of whether the rule makes sense to you, you knowingly accepted the rule when you purchased the ticket.

Frankly (and I realize that this might be an unpopular viewpoint), I don't think that the airlines do enough to punish people who use hidden-city ticketing. All too often, if one has a plausible excuse for missing a flight segment, the airlines will overlook it.