There was a similar story here in Canada not too long ago where a 3yr old was not seated by her parents and they were not going to pay extra to have her do so, because the parents said it was stupid to have to pay to be seated next to your own child on a flight. They said there should be a law against separating children from their parents.
http://www.cbc.ca/news/canada/british-columbia/air-canada-child-seat-fares-1.3560027 Low and behold the Canadian Transportation Agency already had a mandate that the airlines had been breaking by not automatically seating children under 12 without an extra fee. I think it's a safety issue for the airlines. In an emergency who is responsible for the young child seat 3 row away from Mum or Dad? Who is going to make sure the child has their seat belt on during the flight in case of turbulence, put the oxygen mask on the child should the drop?
I flew after this came about and all 4 times DD was seated next to me automatically. Were they the best seats, no I didn't expect that, we were toward the back of the plane in a middle and window seat.