Carryons are by far the best experience for a passenger - your bag is there with you and you don’t have to arrive at the airport early, nor wait around at baggage claim. All business and frequent travelers would pay extra for this.
Meanwhile, carryons are worse for everyone else, and for the airline! They massively slow down the boarding and deboarding process while you wait for people to heft their massive suitcases up into the bins.
Fewer carryons means faster turnarounds which means more profit.
Thank you for listening to my talk.