Because It Costs Money.
This is what happens when you address things from the perspective of pure design. Trust me I know — I’m a designer and a little OCD to boot. The airlines have bigger fish to fry than the redesign of their in-flight-entertainment systems. Their primary imperative is to make the most money flying you from Point A to Point B. This is reflected in their focus on how to cram more seats into the same amount of space.
With rising operating costs, pension funds, dealings with the respective unions and the fluctuating cost of fuel, profit margins are slim for airlines. Why else are they charging you for literally EVERYTHING that used to be free? In this day and age, unless you’re flying 1st Class even the peanuts aren’t free. Heck they don’t even distribute peanuts. First Class flyers expect a selection of warmed nuts.
The last thing they’re thinking of is overhauling an in flight entertainment system. They’re paying enough just to license the content. Many airlines are experimenting with loaner iPads and other options that don’t take away from their bottom line. Fast Company’s Terminal Velocity blog outlines just why airlines aren’t investing in IFEs, “They’re expensive, out-of-date, and redundant in a world where everyone flies with a laptop.” I’d add tablets* and smartphones to that list as well.
You’ll see more airlines adding, and charging for wifi access before they upgrade or redesign IFEs. This also why you see a proliferation of power ports and USB ports on more recent models from Airbus.
You should be criticising/pursuing the airplane manufacturers and the firms responsible for designing the interiors/systems — not the airlines themselves. The airlines don’t design their own IFE, they choose from options available from the airplane manufacturer. Customization cost money, redesign of the UI/UX is prohibitive. So guess whats the first to go when they have to cut costs?
*My iPad with Retina Display and noise cancelling headphones keep me from even interacting with the built in IFE. The difference in image/quality is hard to reconcile when you’re watching a movie. Plus there is a growing legion of offline video apps (like Preload) that support offline viewing.