"Limiting the amount of water? That's a health and safety issue. They've gone too far there, unless it comes accompanied with low-flush toilets and what not. Perhaps OSHA should hit them with a big fine."

No, actually, it's not. They also limit the amount of jet fuel they carry. That also is not a health and safety issue. This is much like the comment you made in regards to the government needing to provide regulations around seat pitch for people's safety. They already do this. No offense mate, but you might be better spending some more time reading about the industry before posting on here. It might clear up some points you seem to be missing.

"It's that they haven't really made a sustained commitment to differentiate themselves on service. It takes time: they have to do things better for long enough for people to notice."

That's not correct. I'll be getting breakfast for free on my CO flight tomorrow. I'm also on the upgrade list, will get a priority line through security and will board first. CO has excellent on board service. The airlines do try to differentiate themselves on service. They do things that make them competitive and profitable. More room in coach would cost them a fortune to take out the seats and they would lose revenue on most flights. It would also reduce capacity on full flights driving up prices for the end consumer. This has not been proven to be a successful idea. AA proved this quite clearly. Saying that consumers don't equate AA's MRTC promotion and advertising with being able to recline more and open their laptop more is silly. People understand what more seat room means.

It's not a lack of advertising that made this fail. It was that it was not a competitive advantage for AA. You guys can rant on about how it was advertising or whatever analogy not related to the argument you want, but this has failed. The benefit of this did not make up for people who just want lower fares. It didn't work. You can talk about what you personally like, how you think the industry should work or how the chicken thigh trade in rural southeast asia is a good example of why this works, but in the end it hasn't and it doesn't.

"Of course this isn't true for everyone, and different people value different things. I, for example, will never pay more for a better hotel room -- I'll book the cheapest place that has a bed and a shower. But it's true for many."

Yes, there are always individuals who buck the overall trend. American didn't end their More Room Throughout Coach because it was such a huge success. They ended it because people didn't care and it wasn't. This wasn't due to lack of advertising, it was due to the market itself. It wasn't worth it.