This is only true if those seat assignment charges actually result in significantly lower ticket prices for everyone else, which is far from guaranteed.

No, you see, if they don't lower costs to the point of making no profit, then they will go out of business. Thats called competition and it's why no companies are able to buy shares back or pay dividends.

It's not guaranteed, but competition solves this problem, and competition has been empirically particularly effective in the airline industry.

There is a very good reason people fly Spirit/Frontier/Allegiant/Sun Country.

I'm not a fan of a lot of the fees that airlines impose--but then I also don't fly budget airlines or buy the cheapest tickets. Personally I'd probably be happier with a more premium flying experience and somewhat higher ticket prices--though not enough to routinely upgrade to business class. And I'm sure there are many people for whom air travel over Christmas to visit family is something of a luxury appreciate being able to spend less money.