Doesn't it also have to do with the no fly list? Airlines have to cooperate with the feds and make sure the paper work is compliant... Including boarding passes matching names of passengers.

When they first implemented this it was also to cut down on something I'll call "reverse overbooking" (for lack of a better word).

I still remember the days (not so long ago) when you could reserve a plane seat over the phone, show up at the airport and pay in cash, then board your plane. All of this without showing any ID whatsoever.

The airline reservation in those days was computerized and the ticketing could see reservations on other airlines (at least the major carriers could see each other). So if you booked a Wednesday afternoon flight on United when you already had one on American the agent might say "Mr Daks, I see you have a reservation on American, would you like me to cancel it for you?".

So, given this is how it used to work, some people (like me) would call an airline and make a reservation in a fake name. Then I would call a second airline and if the fare was lower make another reservation in a second fake name. Then I would call another airline and repeat. At this point I would have multiple reservations outstanding in many names.

Then a day or two before my flight I would start calling all the airlines back and find out what the fare currently was. If it had dropped since the original booking I would ask them to match it. If they wouldn't match it I would hang up, call back pretending to be a new customer (under yet another name) and make yet another reservation at the lowest fare.

Eventually I would show up at the airport, claim to be "Frederick von Ferdinand" or whatever name I had given, pay cash, and board my flight.

Ok, enough about the ways people hacked airline fares in the days before the internet and credit cards and widespread identification cards, let's look at this another way...

In the old days reservations were made over the phone and many people paid cash when they arrived at the airport. This was true independent of people like me who were hacking the system.

In the 1940's and 1950's airlines generally only sold as many reservations as they had seats. This meant that many flights could be half-full or less due to no-shows. In the late 1950's and early 1960's airlines starting overbooking flights to handle the problem of no-shows. It was generally rare to turn away passengers with reservations due to the number of no-shows but it did start to happen at busy hubs and it made passengers pissed. The government came close to banning the practice and carried out enforcement action against at least one airline.

Today, however, we live in an era where almost all passengers make reservations over the internet, pay in advance with a credit card, and fly with confirmed ID. The overbooking practices of the 1960s no longer make sense except for the fact that the airlines today are trying to squeeze every penny out of their passengers. I'd like to see the practice abolished.

Footnote: Yes, technically it is still possible to pay cash and fly without ID, but it is very rare and you are going to jump through quite a few hoops to do so.