I read through this long thread with great interest. We're in the market for a new Mac to replace an ancient, decrepit MBA and were looking for information to help us decide which notebook to get.
Setting aside all the technical debate over external monitors, driving dual 4K displays, Thunderbolt USB-C meaning as to hosting, etc., I found myself agreeing -- and disagreeing -- with both "sides". Maybe our thoughts on this will help others in the same boat!
OLD TECH
The MacBook Air is old tech, dated, and aesthetically unappealing, especially with its large bezels and non-Retina screen. After getting used to retina displays on our iPads and iPhones, it is HARD reading on the MBA's screen. Well, let me be more precise, it is hard scrolling through text -- the screen shimmers, flickers, and does not remain smooth. That's true on brand new MBA display models, too. It's visually distracting and tiring. The retina Macs are qualitatively so much better and so much better to view and work with text on.
LEGACY PORTS AND BATTER LIFE ARE USEFUL
OTOH, the MBA's suite of built-in ports, familiar keyboard (which still isn't that good compared to older ones with greater travel), and long battery life are valuable, incredible advantages over the new Macs. (Yet, 8-10 hours of the new Macs is more than enough for our needs.)
KEYBOARD AND PALM REST
We never really liked the MBA's keyboard -- the keycaps wore off, it had too little travel (like typing on a brick), etc. The 2nd gen butterfly keyboard on the 2017 MBP seems pretty decent, although we are worried about reliability -- far too many reports of malfunctioning or misfiring keys with the butterfly keyboards. Their travel is even less than that on the MBA. So, that's a huge minus as to the new Macs.
But an even bigger issue is the palm rest. It is far too small on the MacBook, passably OK on the new MBP, and just right on the MacBook Airs.
DONGLEGATE
True enough, we have a couples of dongles for our old MBA -- ethernet and display port -- so, at one level, needing dongles for the new Macs is an overblown concern. OTOH, popping out a camera card and putting it into the MBA or attaching an external USB hard drive to it is simplicity itself. No hunting around for a dongle, adapter, or cable. Just plug in the card or the device. A big plus for the MacBook Air.
COST
We know we need 512gb in our new Mac. So, we're looking at $1,250 for an MBA; $1,550 for the MB; and $1,650 for the MBP. (Education pricing.). However, we have to add in up to $100 for adapters and hub (let's say, $70 total); and, because it's a worthwhile option, $180 for 16gb of RAM for the MB and MBPs.
So, then, we're comparing $1,250 for a new MacBook Air with its less than stellar screen but other advantages vs. $1,800 for the MB, which is too small vs. $1,900 for a new MacBook Pro. With tax and the differences in Apple Care price, we'd have to spend $700 extra to buy the MacBoo Pro!
Yet, there's the screen issue...
IF IT WEREN'T FOR THE SCREEN, WE'D BUY A NEW MACBOOK AIR IN AN INSTANT!
YES, KILL THE AIR AND LOWER THE MACBOOK'S PRICE
So, after all that, we'd agree with the original post. If Apple dropped the MBA and the MB's price -- and, smartly, bundled the MacBook with a recommended hub -- it would replace the Air. We'd be willing to accept a somewhat smaller screen and palm rest -- and even a dongle or hub.
We'll predict that next year will be the MBA's last, with both it and the MacBooks getting major price drops. We'll also predict that our prediction will be wrong!