Last I checked, the largest European legacy flag carriers (like BA, LH, AZ and KL/AF) still serve complementary meals or snacks (usually a sandwich) and alcoholic beverages to coach passengers on longer intra-European flights. Some (BA, for example) also show free movies on longer intra-European flights. And some airlines give you a free newspaper to read - which is unheard of on US domestic flights other than the LGA-BOS/DCA Shuttle. You don't need to "pay for your service" on the larger European legacy flag carriers.

The fairly new European LCCs like Ryanair and Easyjet and some second-tier legacy flag carriers (like IB, EI and SK) DO nickel-and-dime their passengers for inflight services. But these airlines also offer truly rock bottom fares to some customers - as little as 1 Euro in some cases. Not even the US LCCs employ that business model. Moreover, because Europe is relatively small and more densely populated, it has a much better developed railway system than the US. As a result, intra-European air travel was largely the domain of the business traveler until the rise of the LCCs in the past few decades. These new European leisure passengers don't have the same expectations about air travel as their more seasoned Americans leisure passengers do. Customer-unfriendly use-it-or-lose it no standby policies, and other nickel-and-diming can work in Europe, but won't work here.

The European flag carriers are still profitable in part because they have historically been government supported monopolies and even today face limited competition. The Italian and French governments still own a chunk of AZ and AF/KLM, respectively, and many of the others were under some form of government ownership or control for decades until recently. And all of these airlines still have many of the benefits of their former monopoly status, including control of most landing slots at their home airports (especially BA at LHR), and almost total domination of intercontinental service from their respective home countries.