No, you're incorrect. Carty tried to one-up United by expanding legroom in all rows after United rolled out its Economy Plus in 2000. In fact, AA's yields were above UA's while MRTC was in existence. MRTC co-existed with higher yields than the competition.
Along came Arpey, a well-known opponent of More Room, and began dismantling it in the midst of 2003, when AA needed every advantage over the competition. Instead, he claimed that packing in more seats was worth $150 million in incremental revenue each year. Lately, however, UA and DL have seen better unit revenue increases than AA.
If this idea were a "failing idea," then you gotta wonder about UA, which has stuck with it for 12 years now and why UA is continuing it even though Smisek, formerly of CO and a vocal critic of more room, has taken over UA. And you gotta wonder why DL has finally matched UA. Airlines offering more room to some economy passengers have the numbers that you and I do not have, and they say it works. But maybe you're right.