It is so hilariously obvious that the optimal arrangement for airlines is to offer a free checked bag and charge for overhead bin space

There are two primary blockers here: 1. People would hate it and would punish any airline that tried 2. You can’t easily regulate what folks do once they enter the plane. Only a backpack or purse with larger bags as an amenity and you’re cooking with gas

When planes take off late they have to fly faster to make up for the time and avoid downstream impacts. That uses more fuel (why they don’t fly max speed all the time) Time is fuel and fuel is money