You got it backwards. If economy passengers preferred better services to cheaper fare, they would have chosen airlines with better services, and airlines would have to adapt accordingly, offering better and more expensive services.
They can't, because when it comes to their wallets, passengers don't actually prefer that, whatever they say online.
Business/first class passengers are a minority group who say "Fuck it, I have money, I want to be treated like I have money." So of course airlines offer them better service - at a much higher price.