Why do you think being regulated utilities would preclude having multiple classes of service? Airlines had first class before deregulation: https://en.wikipedia.org/wiki/First_class_(aviation)#History

Ah yes, because I am also forced to buy the same amount of electricity and water from my regulated utility regardless of need.

That's not how regulation works. Or at least not how it has to work.

I don't pay a flat fee for my water, electricity, or gas usage, regardless of how much I use. I pay for the gallons, kWh, and therms I actually use. (Yes, there are other fees on those bills, but my usage actually matters.)

Airline regulation doesn't have to specify standardized seat pitch, etc.

Sure, there's probably some utopian nirvana regulation that gives you exactly what you need.

In practice airline regulation did preclude the airline from adding more seats. So in practice it banned airlines from offering you cheaper fares in return for enduring less legroom.

Airline regulation as common carriers is not a hypothetical. We used to do it, and none of the things you describe were an issue

In practice airline regulation did preclude the airline from adding more seats. So in practice it banned airlines from offering you cheaper fares in return for enduring less legroom.