I guess the only thing that is reasonable to say about this topic is that it would be better if the game algorithms dealt with short sighted business practises more effectively. It might take a little while, but in the real world companies that make an entire market segment unprofitable go bust or at the very least their boards are fired by their stockholders. I think the game logic is pretty good as is, but there are still some holes that allow dumb behaviour to be sustainable. That being said, I'm not sure in real life even LAX to SFO could support the 25 airlines currently competing for passengers, so the game logic has to 'give' somewhere.
As for capitalism being solely about looking out for yourself, that is not strictly true and doesn't necessarily mean screwing everyone else at all costs anyway. It is not in any one companies interest for a market segment to completely collapse and profit margins to reach zero. Why do you think companies are constantly being caught colluding with each other and being punished for it (especially in the airline industry where price matching on stuff like fuel surcharges for instance is rampant)? It's much better that everyone in a market make some money than no one makes any.
Air1, perhaps YOU should look it up. Might I suggest reading Adam Smith's Wealth of Nations first.
And, anyone who seriously thinks they are a shark by ruining a market for everyone should consider that once all the fish are gone everyone goes hungry. Seriously it's more like being a insert french for shower here than a shark.