Slawko makes some good points. There is still a fair bit of choice in the U.S. compared to other countries. For example, someone going from Boston to Tampa can fly non-stop on US Airways or Delta Express, or go on Northwest, Continental, Airtran, Midway or United if he doesn't mind changing planes along the way. As Slawko pointed out, having to compete for price-sensitive passengers, sometimes with half a dozen rivals or more, means having to trim costs. Meals are an easy target: they're an easily adjustable cost, and cutting the average cost of a passenger's meal by just one dollar can mean millions of dollars saved per year.
Airlines, like many other industries, have also fallen victim to the great scourge that is turning the world into a dehumanized modern Hell of ringing cellphones and more kinds of 'rage' than anyone can count: the fanatical pursuit of ever higher levels of productivity. Assembling fancy meals on dishes takes more time than scooping stuff onto plastic trays, loading those meals adds to turnaround times, and serving all those meals in a timely manner means having to have more than just the legal minimum number of flight attendants.