a credit instead of a refund is almost the same thing as not offering a refund. you're going to have a hard time using that refund in a manner that benefits you (not taking a flight for no reason)

And what percentage of people will take them to court just to get them to refund their ticket?

Airlines have full time lawyers with nothing to do but push paper around.

Why are we making it harder for the consumer to resolve an issue when the flight is clearly cancelled?

They just want to force you into weird store-credit style refunds so that you cannot go to a competitor or choose not to travel.

Yes, But no one wants to have to go to court or arbitration to get a refund on a service that the service provider cancelled.

If AA cancels my flight, I want my money back without having to ask for it. I don't want to have to submit an application to receive AA credits that expire in 6 months, and then have to initiate legal action to get my actual cash back. Or having them say that they rebooked me on a flight three days later so they are off the hook.

The current rules make it so that the customer has the power. I can still give AA the option of rebooking me or refunding me, but it is MY choice.

Airline travel is safer than it has ever been in its entire history. What is your evidence for this hypothesis?

If you know it's a low value post then don't post it.

Every one of their pilots learned to fly in a GA or military aircraft, with the vast majority being GA.

80% would be way too much, the consumers would catch on and probably not buy tickets anymore. But don't worry, the airlines' best MBAs will be hard at work calculating the exact percentage of flights they have to fly before it starts hurting the bottom line. And once all airlines start doing it, they could bring that percentage down - what are the consumers gonna do if that's the only way to get to the destination?

They still have to offer replacement flights, and if the replacement flight isn't reasonable they have to refund. They can't just keep your money.

Don't forget that a lot of flights are business flights. Fortune 500 companies will negotiate deals with the airlines, and they will ensure that getting there matters. Sure the CEO flys the company jet, but the next level down rarely does, but they talk to the CEO and will ensure that the chosen airline will get their people there by contract (wherever there is), if the airlines start failing to get people there on time these contracts will change since the large companies have enough money to matter. Those who fly a lot (again likely for business, even small businesses sometimes have someone flying several times a week) again are people the airlines need to make happy as they will go to different airline if there are problems.

Which is to say they can screw the "common man" who rarely flies, but most of the business is people who have enough power to to to airlines that treat them well and at that point it normally isn't worth screwing anyone.

I imagine the class action lawsuits at that point would bankrupt them

They were being pretty annoying, which is why the regulation went into place. The "wildness" is that they're openly trying to make it annoying again.