[nukeop]

This is because you used to be able to sit wherever you liked once you boarded the plane, and only premium passengers could get a reserved place. Now they are reserving you a bad place beforehand, so you can't just sit wherever you like, and if you want to change that, you need to pay. What used to be free, is now being charged for, and there is little reason to do so other than "because they can" because it doesn't raise the operating costs.

[rocqua]

If a company raises prices 'because they can' and people keep paying, that is just how markets work.

In some sense, this leads to a better allocation of seats, as it allows those who desire some seats to pay for them, whilst those who have to preference get a cheaper flight. Now, people who used to be fine with the dice-roll of not paying get a worse experience. But this comes with the upside of those who really wanting the seats having a better chance.

[nukeop]

People keep paying because there's no other choice on certain routes, short of driving or taking a bus.

This isn't an upgrade or anything, people who wanted to pay to reserve seats could already do so. You could have also not paid, and picked whatever was available, switch with your neighbors, and so on. Obviously, since Ryan Air figured out that they can extract some extra bucks out of that, you're now assigned a place and can no longer just pick whatever is available once you board. This is a standard rent-seeking behavior with no advantage for the customers.

[icebraining]

This is a standard rent-seeking behavior with no advantage for the customers.

It does if they use the extra income to reduce the ticket price. Which would sound pie-in-the-sky for most other companies, but considering Ryanair's prices, it wouldn't surprise me.

[Symbiote]

I think there's a clear advantage: boarding is faster, as there's a lot less competition (or even argument) over the nicer seats.

Ryanair are fairly clear about what you must pay for when booking, and there are plenty of routes where they have competition from EasyJet, Norwegian etc.