Compared to twenty years ago, fewer passengers are using check in desks and fewer passengers are traveling with hold luggage. I remember back at Glasgow Airport many years ago, every British Midland flight had two or three desks dedicated to just the one flight. By contrast, nowadays flyBe will only have a few desks open which are used by all their flights. Things have dramatically changed.
The infrastructure may be in place, but it's actually not been expanded anywhere near as much as you'd expect given the rise in passenger numbers. Ultimately, if we all still had to go to a check in desk, airports like Edinburgh would have had to invest millions in building new check-in halls, but this hasn't really happened. More flights are using the same number of desks at many airports, because fewer people are using check in desks. This means that fewer desks are needed per flight. As each desk needs to be staffed, this reduces the cost of staffing. If fewer bags are being loaded onto the plane, the cost of hiring baggage handlers and purchasing the necessary equipment is reduced.
So, yes, there's actually been a huge cost saving to airlines and airports by encouraging travel with carry on baggage only.