Airlines LOVE baggage fees. They're tax free. I wouldn't be surprised to see airlines reduce ticket fees and just boost bag fees for more tax-free revenue.

Reference this Hipmunk visualization: http://visual.ly/air-travel-baggage-fee-revenue-timeline

Apart from the tax status, it seems that baggage fees are an effective way to achieve market segmentation.

Would the same simulations run on a wide-body 2-aisle plane (such as A380/777) have substantially different outcome? It feels like they board in the same amount of time as a single aisle.

Banning carry-on luggage that doesn't fit under the seat would be a great place to start.

I talked to a crew member once who said that before they allowed carry-on luggage the boarding process took less than half the time. She really missed those days.

This is why Spirit started charging for carry-on bags. However, I don't think they allow free checked bags.

No, Spirit started charging for carry-on bags because their business model is to sell you a ticket for as low as possible and charge a ton of fees to make up the difference.