A long-haul flight is so much more pleasant with wifi. There's only so many movies I can watch (for me, 1 or 2) before I get bored out of my mind.
It can get lonely on a plane if you are traveling alone. The people around you aren't always willing or able to talk (they may be asleep, don't speak English, or are preoccupied with a movie), so you may end up sitting for extended periods with nobody to talk to.
Being able to chat to friends while in the air makes the experience more comfortable than any seat ever could.
(Mind, in those circumstances, a choice between being able to stretch out in business class vs. having WiFi in coach would tilt even harder towards the former. But after about 8 hours in the air, I do find a lack of communications really starts to bite.)
For example, there's plenty of RPGs of all flavors and settings that would have you exploring, conversing, and battling. Many don't have high system requirements, either, so could be comfortable to play on a netbook or tablet.
Edit to add another idea: I know some flights have games you can play with people in the seats next to you. Why not a plane-wide chatroom of some sort on a web portal? Then you could textually converse with many people without bothering anyone and without any bandwidth/latency restrictions.
How about downloading e.g. some tech talks? Or video lectures?
In-flight WiFi and cellular were available on my last Etihad flight (Europe -> Bangkok via Abu Dhabi).
The charge was something like 25 EUR to share the 1MBit/128Kbit link with the rest of the plane.
So no wonder the uptake on this service is slow low. Business passengers will probably take it because the company pays (or it's included in the cost of their ticket) and for economy passengers it's too much to pay for a handicapped internet connection where they can't even Skype friends or browse Facebook because it's so slow.
The cell / ground based systems have a different model, and the installation costs, while high, aren't quite as high. But, the providers there, like GoGo, set the pricing, keep the branding, etc, and only share a commission back. I don't believe it's a net positive revenue for the airlines either, but I know less about that space.
It was novel a few years ago. It's not any more. At least not for regular travellers.
I've used it on both Qatar Airways and Emirates, and would recommand it if you like to work during flight and your work needs the internet (eg emails, your task trackers to follow/answer your team, code reviews, ...), it's also been cheap enough that it fitted into my needs (paying it and getting myself up to date was worth more to me than not paying and then having to catch up after landing).
That doesn't sound like it's going to improve inflight WiFi much. They do mention also downward connectivity to cell towers, so hopefully the satellite link isn't used much. There's not much info on how many spots over Europe won't be covered by the ground cell towers.
Edit: I do find the grumbling about inflight WiFi performance funny. You're in a metal tube that twists and turns, 5+ miles high in the sky, going 500mph. Installing the system means cutting a huge hole in the plane and detailed certification testing down to every wire connector...and thus nothing can be upgraded at a normal pace. Isn't being able to check your email novel enough? Why are you surprised that YouTube doesn't work well?