Delta to Add First-Class Seats to Shuttle Flights

I know I just posted something, but I found this article quite interesting, even if it's not particularly groundbreaking.

Delta has decided to add first class seating to its East Coast shuttles*, charging $100-$250 more for first class. This means that VIPs no longer have to battle mere commoners for seats. Instead, they only have to fight with about 14 people for choice seats. US Airways has already implemented this.

I can see positives with this decision. One positive: it’s finally a source of revenue for airlines that offers something back to the consumer. Instead of “There will be a small fee for check-in baggage/priority seating/meals/cocktails/a bottle of water,” it’s “We’ll make the fares tons more expensive and not apologize for it, but it's worth it.” They’re targeting a market with relatively inelastic demand for seats. If someone has to get to Boston urgently, an extra 100-250 is not so much. Also, since frequent fliers get complimentary upgrades, it may encourage brand loyalty.

There are some negatives too, though I can’t think of as many. It could make certain consumers acutely aware of class and entitlement, so that if they don’t get a first-class seat, they may feel resentment at having to sit in coach when it was the norm before. And there may be companies for whom an extra 100-250 all the time is a big deal, and if they have no choice they will see traveling costs add up.

How can struggling airlines best earn revenue? Should non-budget airlines follow the budget route and keep charging for the little services, or should they bring back partitions and earn revenue by catering to those who can (ironically) afford to have those services for free? Should United and American follow suit?

*I first read this in the NYTimes, but if you don't have an account you can find a similar but more brief article here.