"So why is air travel, among the most differentiated experiences we have in the normal course of life, purchased by so many people as a commodity?"
So not true. A restaurant is a much more differentiated experience and also a "perishable" one that people are willing to pay a premium for. JetBlue has TV's and SouthWest has free luggage but you can't pick your seat -- what other differences are there between airlines?
I you think you hit the nail on the head with the airlines destruction of any price/value correlation. The table next to me might be getting a free appetizer or desert but they are not going to be paying 1/5 or 5x as much as I am.