The change stemmed from two things. First, the whiz kids in the crystal palace really believed that once they started charging for drinks, everybody would follow suit. Wrong! Second, USAir has constantly ranked among the worst in passenger complaints and a large number of those are from passengers who don't think they should have to pay two bucks for a water on a 5 hour flight.
In truth, how many activities are there where you are provided with free refreshments? And look at Southwest. They give you about 4 oz of soda in your tiny cup. However, they give you as many refills as you can hold down and they do it all with a smile. Many AWA pilots commute on them between PHX and LAS because the service is better *(and they seem to have better scheduled flights).
For what it's worth, I'm not sure the millions that they made charging for sodas was worth all the bad publicity. About time they changed it back.