They don't screw up the business model, the business model relies on it. Without these fares, everyone would be paying more and flexible passengers would be inconvenienced.
But the presence or absence of flexible fares doesn't change the fact that the precise number of passengers trying to board is uncertain, and that will always create a complex optimization problem if you care about both efficiency and customer satisfaction.
The problem is that right now every ticket is effectively a standby ticket, and this is buried in the fine print.
A lot of people have thought a lot about these problems for a long time now.
Many of them are both clever and well-intentioned.
I understand that last sentence is where we differ.
So I guess we're done here.
You've chosen to invoke an Argument By Authority, so I guess you're right.
The problem is that there is lots of competition backed by heavy state funding that can weather out bad events (e.g. a 9/11 scenario with a general downturn, or something as simple as a volcano eruption, or mundane such as strikes of any kind of personnel).
The other smaller airlines have to keep up with the offering of the big giants even if they're unsustainable or risky or they risk directly going out of business.
Airlines are under no obligation to offer fully flexible fares. If they screw up the business model so badly, maybe the answer is to simply stop offering them.