I cannot believe that sitting next to someone v not is that big of a deal, and if it such a big deal, then buy two seats and the problem is solved, you have the ability to control your own flight experience or play the lottery.
I've been flying for way too long, way too many miles (3m+) and have never thought I should be treated any different than anyone else. Who knows, maybe the person in 4B just bought a full fare ticket and the P1/CL was flying on a red-e deal...
In terms of loyalty, I'm loyal to QF, probably because the benefits (I spend points on J class to/fro USA for family) are easy to use (for their holidays, no issues planning way in advance) as I tend to push the call centre to help out, i.e. make seats available that do not show up online and pay the couple of thousand point penalty. I also asked the call centre to waive a change fee, my office in NZ booked on the wrong date returning from LAX to BNE, after asking the $180 fee was waived. Sitting next to a person, my assumption is this will probably happen on every flight, as its public transportation.
I do understand your position, but when flying cattle class, you are in with the masses but you want privacy, pay for business class or buy two economy seats, that is the commercial decision all passengers must make. I make this decision with my business, we only fly economy and for leisure, my family likes their privacy so we use more points to buy them this component.