I think QF thought 'well, these are short flights, and who's going to complain anyway?' (combination of companies paying the extreme J class fares, and the shackles of status mean non one is going to jump ship over the issue).
For short flights maybe I understand their thinking. You don't really get comfortable and relaxed on a flight of an hour.
But where it falls down is the introduction of the 737 on longer flights like Bali, and even PER. On those flights you do want to try and make the best of the limited comfort there is. Does that include people queuing in the aisle, with their bums in your face, for a 6 hour flight? Does it include people walking up and down, flexing the thin cabin floor, when you might be trying to snooze for an hour?