FWAAA,
your analogy has to consider that IND-ORD compete with IND-ATL or IND-DFW for domestic connecting traffic. IND-ATL and IND-DFW are long enough to have local demand that would be interested in a first class seat - including but not only to connect to int'l flights.
As for why FC exists on regional jets, the reason is because carriers want to create a "seamless" product between their regional and mainline flights... but, more pragmatically, pilot contracts generally limit seats on regional carriers to 76 seats and the CR9 and E175 could hold more than that if they were configured in all coach. Thus, airlines want to have a unified product regardless of the aircraft type - or paint that image anyway - but they also would be carrying around empty space or have to use smaller aircraft if they did not put FC cabins in. The proportion of FC seats on the CR9 and Ejets is generally higher than on mainline aircraft.
I don't think that anyone is arguing that FC including some type of meals are not worth it (I'm not).
The question is whether AA's FC service was overly generous in comparison with the competition and AA leadership thought it was. If AA was offering a product that cost more to operate than its competitors, then there should be evidence the product is generating more revenue.
In the case of US, they got by with less than industry average FC service and AA (former US) execs are paying for upgrading the US product with cuts to AA or tapping into AA's premium revenue - something that was obviously going to happen when the merger was announced.
Just for curiosity, what really is your alternative? Some might say they will go to Virgin America but is that really an alternative for very many AA passengers? Their premium cabins are not very large and are being filled as it is - on top of their fairly limited route system.