My gut is this comes down to lack of real antitrust enforcement. If your customers have no choice but to come crawling back to you then why treat them well?
As in, it doesn't matter that you're "an" asshole. It would matter if you were "the" asshole, but all of you together can do what you want.
Seems like the opposite as the origin was Delta trying to compete with Spirit and then all the legacy carriers following.