Planes were built in the first place to have plenty of cargo space outside of the passenger cabin and only a little bit cargo space directly inside the cabin so

Planes were built in the first place to have plenty of cargo space outside of the passenger cabin and only a little bit cargo space directly inside the cabin so that the passenger cabin could focus on other amenities. Checked baggage wasn't just a convenience, it was a necessary engineering trade-off to keep cabin space comfortable. It's no surprise that the comfort of the cabin space has directly decreased as checked baggage fees contributed to a massive tragedy of the commons in the passengers cabin space. The "premium", more finite resource space is passenger cabin space. If the fees were truly about market economics (rather than just fake profits the airlines knew they could get away with) you'd expect that the actually more limited space would be the one with fees and that they'd be charging carry-on fees, not checked baggage fees. (I think that would be amazing how much it would streamline TSA security checks, boarding, and deplaning if they charged fees per carry-on.)