>what the actual harm is in airlines being "quasi-banks"

The word "air" in "airline" implies that the main purpose of the business is to move passengers and freight via aircraft. If the main purpose of the business is to generate credit card swipe fees it will probably not do a good job at moving passengers and freight through the air since that part of what it does doesn't generate most of the profits. And we've seen this already with the onerous fees and packed planes that are the standard model now ... because each airline has a captive population that flies it because that is where their points are.