Charging for assigned seating will lead to too many arguments or fights between people who paid an extra $10 but were running late, and the people who chose the seat Southwest-style. The policy of saying "if you're late, you lose it" will not stop people who paid extra money from pursuing their right to their seat.
To alleviate this, Southwest could make a special section at the front of the plane for assigned seats only, and alert regular customers to bypass this section.
Another way for Southwest to make more revenue could be to charge for carry-on luggage in the overhead bins. Maybe an extra $5 and your boarding pass gets denoted with a special mark. Without this mark, the FA at the gate would check your bag in. Let's say you didn't pay the extra $5; you wouldn't have to check it in at the ticket counter if your luggage was small enough. You could just go straight through security and then check it in at the gate.