Farecast could absolutely change the way people think about buying airline tickets online. It is only available in Seattle and Boston right now, but once it rolls out to all cities, you will be able to see historical pricing for routes at any given time of the year. This is great because airlines are quite predictable in the pricing moves they make. Observe the pricing graph, and you can easily tell if it is a good time to buy a given ticket, or best to wait a few days.
The problem here is that Farecast is designed to be a victim of its success. That is, if everyone uses Farecast, then the airlines have a serious problem because their pricing schemes will no longer work. The result? Airlines will change how they price, which will cause Farecast to become a whole lot less good at predicting prices.
What can Farecast do to avoid this? If they have meaningful patents, they can prevent competitors like Flyspy from making the same information available to everyone. If that is the case, then Farecast could sell subscriptions. By limiting it to people most willing to pay, the impact of Farecast on revenues would likely not be great enough to force the airlines to change their pricing policies.
However, as Mike Arrington points out, it may be in the best interests of consumers that websites like Farecast exist. Why? Because if airlines are pushed, they may come up with a simpler pricing structure.
Funniest of all is that Southwest is not on Farecast, often has the best rates, has the simplest pricing of all and has been profitable for years while other airlines have declared bankruptcy multiple times.