In general, flight pricing seems rather opaque; I'm always confused by flights from city A to city B that are more expensive than flights from city A to city C with a layover in city B. I'm all for more transparency of the air travel market.
Interestingly, low-fare airlines have tried working around the problem by setting prices super low, such that they lose money on each flight by default, but making it up in auxiliary services - either selling addons that cost them nothing on margin to implement (priority boarding, early checkin, seat selection), upselling external high-margin services (car rental, hotel bookings, airport transfer services, insurance, phone cards) or directly extracting money from customers (obtrusive advertising, in-flight sales pitches, extremely punitive charges for baggage/airport checkin/over-weight fees/not following obscure rules). This seems more sustainable than the traditional approach of customer price segmentation if price transparency increases over time.
That example is pretty simple. If you consider a non stop flight as a different product than one with layover, non stop has less competition, people who don't mind a layover are more price sensitive and if there's a layover the airline will compete with all the other airlines trying to fill their hubs.
It's like coupons. In theory, coupons are pointless because the coupon price just becomes "the price." In practice, a lot of people can't be bothered to deal with coupons.
Like coupons, this becomes another mechanism for price discrimination. People who really want to pay a lower price will use tools like this to accomplish it. People who don't care as much won't bother and will likely pay more.