I think you're right -- if they had taken an approach along those lines it probably would have had all of the positive effects described without the downside of po'ing so many people.

But what you might be missing is that those positive benefits may not be what they're trying to achieve -- the fact that this announcement has not been coupled with any revision to the fare structure suggests that its sole intent is to try to force certain people to buy the existing sky high business fares. Someone believes that there is a market for that and that a stick like this will drive customers to higher fares.

What they are missing is that business fares are passed on to customers -- and customers are keenly aware of these costs. Nobody has been flying on cheap fares and pocketing the difference -- customers aren't going to say "ok, go ahead charge me more" they're going to say "oh, that's a shame. southwest is cheaper anyway why haven't you been flying them?"

The choice isn't between flying cheap fares on US and business fares on US. The choice is between flying US and flying someone else -- the cheap fares have allowed a lot of people to continue flying US Airways. Take them away (or take away the reason to buy them) and you lose the business.

Maybe the bet is that that's ok -- if we lose 3 out of 4 it's still a net gain so long as we drive the 4th one back to a "full" fare. I doubt that will work but maybe it's what they're trying...