Pricing connecting flights lower is the whole point. The model I've seen is something like this: A has direct flights to B and C for $300. But B is a major hub

Pricing connecting flights lower is the whole point. The model I've seen is something like this: A has direct flights to B and C for $300. But B is a major hub while C is a random regional destination, and their network has too many staff members or individual aircraft that need to get to B. So one of the A to C flights is scheduled to connect through B, and customers who are willing to take that flight pay only $200 for their inconvenience. "Skiplaggers", even though they're getting the same service from a user perspective, are defeating the point from a route management perspective. The discount was offered to improve the airline's logistics by reducing the demand for A->C, and if you're on a hidden-city ticket you aren't helping with that.