Business class costs so much because they aren't paying, it's all expenses and who cares how much it costs the company?
First class is expensive because it's for people who just don't care about the zero's. As they say, if you need to ask you can't afford it.
I don't believe for one second that economy makes a loss, they need to fill that air frame to maky money and if they could do it all with business class they could - but they can't. My best guess would be they pay for the flight with economy and make hay with the higher classes.
I can't see the big turn off for long haul economy though, compared to cinema seats or coach seats airline seats are great, roomy, and recline enough (for me - disclaimer). Long haul economy also has back of seat screens with on-demand movies, music and video games.
My last trip back from oz was a stint from singapore, I got 8 hours sleep, landed in mancester at 8am wide awake and went straight to work - why pay more?