Not sure about your linear expense comment, but will point out that the balconies are open.
I think there is an intangible benefit if the theatre is noticably more crowded. 45 years ago, the show Purlie opened at the Broadway and charged $3 for every rear mezz seat, I think partially based on the expectation of being a hard sell and wanting to attract a new audience. I saw the show three or four times from the rear mezz, which is huge; every time, it was jammed, even when there were a good number of orchestra seats available.
Did their availability keep people from buying orchestra seats? Personally, I believe not...I think most of the folks would probably have stayed home.