I believe Josh Barro started this mess of a debate.
I would emphasize the endogeneity of transaction costs. The airlines could do a lot to encourage Coasean bargaining between fliers, but they don’t. How about handing out little cards?: “Have a friendly haggle with the person behind you. Last year the average price for a non-reclined seat was $16.50.” They could print up standardized contracts, like how they distribute customs forms, including contracts for trading seat assignments or distance from the bathrooms or how you shush your child, or not. Imagine being nudged toward a deal through the in-flight internet system, so you don’t have to turn around to face the other party in the bargain. They could take a cue from Alvin Roth and his matching algorithms or help you set up complex multi-party deals, like how the Denver Nuggets used to construct (and then dismantle) their rosters.
The disutility of bargaining in this environment is high relative to the value at stake. The chance of irritation or hurt feelings is non-negligible, and perhaps people on a flight are crankier anyway. So the airlines deliberately keep the transactions costs high, as the gains from the potential bargain are low relative to the ickiness of the process. The airlines wish to keep a lot of people away from the process altogether, if only out of fear of having to arrest people, divert flights, and so on.
That implies the more we debate this problem, the worse it becomes. It also gives us the true Coasean answer to what is best. Relative to current norms, who does more to make the whole question “an issue” — the seat recliner or the purchaser of the recliner-blocker? Clearly it is the purchaser of the blocker and thus Josh Barro is broadly in the right, the norm should continue to allow people to recline their seats as that minimizes fuss, which is more important than getting the right outcome with the seat itself.
If you don’t like that, United does sell coach seats with extra space, which makes the recline of the person in front of you less bad.