Most pax would want value for money IMHO, rather than just the cheapest available and limited service.
This is true, but faced between a choice of four hours on a Qantas full service flight on a 737-800 for $380 one way with a few free drinks and reruns of Two and Half Men, or a Jetstar no service flight for $$200, I think the vast majority of pax would opt for the latter, it is what makes "value for money" that drives the decisions, and everyone will have their price point.
For me, I do want value for money, now I may value FF points for such a flight at $40, a meal and a few drinks at $20, luggage at $20, that would reduce the QF fare to $300, still that's $100 I'm spending that I can't see a lot of value from over and above Jetstar. Of course if connections come into that makes it more complex.
And not to mention that the $760 return on QF is competing with fares to Fiji, Bali, Singapore, Thailand, NZ etc ...