Ah, yes, it is definitely reasonable to draw that conclusion based on people's disinclination to spend 100% the fare for a 10% larger, somewhat less uncomfortable seat, and/or 1000% the fare for 50% more space and an actually comfortable seat.
What you’re probably thinking of is the US airline specific “comfort/extra/plus” add-on that is priced 10%-20% extra. There is a few more inches legroom but the seats are the same small economy seats.