No argument there. Although I have to say that it doesn't take that much to get to a decent level. And it's absolutely worth it - most people don't realize this.
No, you don't pay for bags even if you have low status, at least on UA. It doesn't take much. Keep in mind that there are quite a few Global Service members, especially out of SFO and LAX. For UA, the crew can certainly tell what your status level is. There's a few stars on the manifest next to your name - **** for GS, *** for 1K, etc. They do treat you better.
That said, flying is much better if you've got status. I just got a $250 certificate because they were unable to accommodate an upgrade for me recently for a 2 hr flight. I got another $350 because a flight from LA to SF I was booked on recently was delayed for 4 hours. Then I was rebooked on the next flight that was already oversold. Most other folks were stranded in LA. Etc. My point is - if things like these fees annoy you (they are annoying!), just stick with one airline for a while. It's not that hard to get some sort of status, and just that little bit will help a lot.
-Felix
Much also depends upon where you are - for most business travel itineraries out of the north Texas area, for example, UAL would be largely useless, unless you opt to change planes. Hence, you are reduced to either flying with AA, or flying Southwest, or committing to changes of plane, which cost time and introduce significant trip-disruption risk.
The principal differentiator I see, though, is the way the carrier handles irregular ops. Because they do not rely upon hub & spoke, and because (as an airline conceived and built upon the needs of business travelers) they typically have significant frequencies on most all city pairs they operate, Southwest has much greater flexibility in handling disruptions at a particular place, and are not nearly as severely impacted by (for example) weather at a particular location.
As a DFW flier, I have been severely impacted by AA's irregular ops policies - they cancel their entire schedule if weather gets marginal here, knowing that as a weather cancellation, they have no obligation to take any measures to accommodate passengers, other than providing them passage on a "next available" basis - which may be several days later. In my relatively-limited airline flying experience, they have still managed to strand me at SNA (I had to buy tickets in America West to get home), San Francisco (I found seats on UAL the next day, where the AA rep claimed no seats on any carrier "...for three days") and Baton Rouge (three clients and I rented a car and drove home rather than wait two days). Other events of similar character, but lesser impact. All, unnecessary with proper management.
There is something sort of pathetic about a customer service model which says, "If you stick with us for a while, we'll treat you decently, but until then, F-off." So, I opt not to reward that attitude with my business, unless obligated to do so. I know many people who ride in the coddling arms of AA elite status, and they are treated well, but no one should be treated with disdain pending achievement of that lofty perch. Since my business travel has never yet taken me out of the country (and is unlikely to do so), if I must fly commercial, I'll take the option which works best, and that will almost always, from here, be the canyon blue 737s, with their greater seat pitch, their never-confiscatory fares, their consistently respectful service and their better-than-the-competition flight completion record. No big first-class seat, and no airport club, but I'd rather fly with the carrier that gets me home so I can be with the family, rather than the carrier that has all the "stuff" which is only useful if you are stuck out in the hinterlands.