Advance tickets are a very good product, and I have used them myself many times as they often work out cheaper than staff rate tickets. But, people must be prepared to follow the rules relating to the cheaper tickets.
The idea of charging less for a more restricted product is common in similar industries. Recently I wanted to book a hotel, and I looked at Holiday Inn (although this scenario is by no means unique to them). I could have booked 3 weeks in advance and got the cheapest rate, but it was non-refundable and non-changeable once booked. So if my plans changed I was stuck with having to pay. However, the flexible rate could be cancelled right up to check in time, and refunded with no fee or penalty, and could be altered at whim. This rate was more expensive than the cheapest rate. So if, as I suspected might happen, I was unable to attend for the first night I could cancel the flexible rate and get a refund, or loose my money on the cheapest rate. I had to assess which was the best option for me. Or I could have just booked the cheapest room I could find, then when they wouldn't give me a refund for the cancelled first night I could start screaming and shouting at the receptionist and calling her a jobsworth and whinge for her not using her discretion.
Now, back to the Railway example. I deal with advance tickets every single day, and like other staff on here I agree that 99% of all passengers use their tickets correctly without problem. However, there is a minority who do seem unable to catch the correct train.
There are myriad reasons for this - meeting finishing late / early; missed connection; plane arrived late / early; didn't read the conditions; read and ignored the conditions etc etc.
The problem with "discretion" is how do you fairly assess all the different excuses? I know colleagues who will just accept any advance ticket on any train as they are not bothered. Now this is fine, until the passenger next time gets on someone else's train and they will not. As it stands at the moment Advance tickets are valid only on the specified train, like it or not. TPE Airport Advance are valid up to 3 hours later if the plane is delayed, but this must be authorised by the airport station staff before boarding.
If someone claims to have been delayed on a previous train, then obviously the Advance ticket would be honoured later. But I always check it out - mainly because much of the time I hear "the last train was delayed" excuse it wasn't at all. Other reasons that I can verify I will accept tickets for - if there has been a major blockage or problem in the town centre which delayed people, or the metrolink is stopped, are all things you normally tend to find out about. I can't however verify if the bus was late, or whether your meeting finished early or late, nor whether the website didn't tell you, nor whether the bloke at the station where you brought your tickets didn't tell you etc etc. So, I'm afraid, in these circumstances it is a new ticket.
If, however, someone is travelling slightly earlier, or on a long journey where the new ticket might be unreasonable, I may well just charge the XS fare.
But why be so strict with Advance tickets?
Think of it this way. In general TOCs offer the cheaper Advance tickets in higher numbers on the less busy trains. It is designed to push budget conscious leisure travellers away from the busiest trains, and get lots of money from business passengers. If everyone would travel earlier or later without penalty "because the Guard should use his discretion", or even by just paying the XS fare, then those travelling at the busiest most expensive times will just buy all the cheap tickets at quieter times and travel when they fancy. You can bet your bottom dollar that not everyone will get charged an XS fare as the train may be too busy or not enough time for the Guard to get round. Thus, those leisure travellers who may only be travelling at quieter times when it is cheaper will not be able to buy the cheaper tickets as they have all been snaffled up by those travelling at busier times to save a few ££. They then may not travel at all as their journey is discretionary. The TOCs end up loosing revenue overall, then the Advance tickets are upped in price or reduced in number and everyone looses out.
Now, this doesn't mean to say I am against flexibility. I do believe that the Advance tickets should be valid for say, up to 1 hour after the booked train. But not any longer and certainly not earlier. This will allow for any last minute problems such as late buses, tubes, or anything else outside the control of the Railway, which we really shouldn't be bothered about. Outside of this 1 hour flexibility I don't think I'm too averse to passengers altering the ticket and using it later the same day, provided it is done at the booking office prior to boarding the train (usual disclaimers about ticket office being available apply). It should not, under any circumstances, be allowed to just get on and XS the fare on the train as this throws up too much revenue risk into the fray. Once on board the train - either earlier or later than the 1 hour window - then a new ticket must be purchased as no ticket were held at all.
I think this is a fair approach - it allows a bit of flexibility to those that need it, allows you to recognise the value of the ticket you have already purchased if needs be, but also punishes those that try and take the piddle. Which to be honest, is the only time you get issues on the train - when folk try and take the p*ss. Most people know the conditions, but then just ignore them.
