Money making exercise -almost certainly yes. But you can't have ever lower flight costs without them looking to make money in other areas. And at least with excess baggage you have the choice.
I often wonder how they manage to calculate take-off weight when the passengers can be of such varying sizes. If you're 8st and get charged for being 2kg's over on your baggage it may seem a little unfair when the next passenger could be twice the weight but under the excess baggage limit
And as for kids being charged less, that has always seemed odd to me. Unless they're sat on your lap they're taking up just as much room as an adult. My daughter has just tripped over the line in the sand and we had to pay full price for her this year.
I'll never cease to be surprised at how many people can arrive at the check-in desks with very over weight bags. It isn't hard to weigh them and most of the places I have stayed have weighing scales you can use to check to be safe.