F that. If you're removing a belligerent passenger, part of the punishment should be that you have to pay to have your luggage returned to you when it arrives at the destination. Getting kicked off the plane should not me you get to delay everyone else even further by making them go find your luggage before the plane can depart. F that.
Hard to take issue with it when they're basically splitting the savings with the customer.
The solution is to set minimum baggage allowance regulations to prevent a race to the bottom.
Loading and unloading bags from the hold costs time and money. Transporting those bags from bag-drop to the plane means paying the airport for that privilege. Misplaced bags etc. adds a customer service overhead.
Ryanair deliberately don't use jet bridges so they can load/unload from both ends using built-in stairs
In a capitalist system, what anything "should" be is what brings most profits. Any alignment with other desirable outcomes is by sheer chance.