Yup, it's a bad pitch. Let's say the economy airplane without the business seats can now accommodate 400 economy seats. You now need two air crews and twice as much maintenance (or more) to transport 480 people (~60% increase) with a smaller percentage of those passengers being business class fares.

What really kills this though is the value proposition for the business class passengers. I think I'd rather pay extra to sit in a comfortable seat for 16 hours, where wifi is now a standard feature, than cram into a smaller (likely noisier) seat for 8 hours. The cases where that 8 hours matters - especially when you can work from the seat if you have to - are fleetingly few. In the 70s, you couldn't do much in an airplane seat so it was wasted time. This is no longer the case and is steadily getting better.