Travel firms sue creator of cheap airfare site

The airlines, in a strict sense, don't care. They'll set whatever prices the market can bear. If the market demands that flights from LAX to JFK are no more expensive than flights from LAX via JFK to Elbonia, they'll just raise prices on LAX to Elbonia, because LAX to JFK is a vastly bigger market. It's the Elbonians who lose, not the airlines.

"The trick only works with one-way flights. Travellers cannot check in any luggage as that would then travel on to the flight's final destination."

    The trick only works with one-way flights. Travellers    
    cannot check in any luggage as that would then travel 
    on to the flight's final destination.

Also, in the event of IRROPs, you have no guarantee that the airline will still send you through the same connecting airport. If you're trying this on a ticket with (e.g.) United from Boston to Milwaukee via Chicago, intending only to fly as far as Chicago, you could easily find yourself going through Newark or Cleveland if Chicago is snowed in or that flight has mechanical problems.

In that case, connecting in Chicago was essentially an implementation detail, United is free to reroute you through any other hub (even Houston or Denver if that's where they've got open seats). I've certainly had more out-of-the-way reroutes with United.

(edit again, just to add more)

You could even wind up on a completely different airline. United could stick you on a Delta flight through Detroit. Many ways to screw yourself.