Standby seats will just jam up the airport and security. Most shoppers will search for the cheapest flight, the airline will sell it as a bargain with the requisite disclaimers that no one reads, and when 100 standby ticket holders show up to the airport all hell will break lose.

Do remember you can't pass security without a confirmed seat. They can't load your luggage without you being confirmed and through security. If every flight on every airline tried this as SOP it would turn out really badly.

If you think I'm kidding check the news around a major holiday with inclement weather. Hoardes of people with standby tickets waiting in terminals, camping out in whatever floorspace they can find. Sounds pretty damn dystopian.