In practice, if you literally replace a 20% tip with a 20% service charge, gross wages for staff decline significantly -- this is a consistent pattern. This strongly suggests that they are not equivalent from the perspective of customer psychology in some important ways, changing customer behavior. Many restaurants in Seattle have tried this and it plays out the same way every time.

The consensus theory among my industry friends is that Americans are more generous with their spending when there is a perception that the money is going to a real person -- tipping -- whereas a service charge goes to the restaurant company. Customers attribute the cost of the meal differently in these two scenarios and they are not as willing to spend more money if it goes to some faceless company instead of a person they interact with.