The reason the FAA allows infants to be held on laps is because they have concluded that if they charged for a seat for the infant, a high % of people would drive instead of fly which ultimately is less safe and in the totality of things would create more deaths and injuries due to the much much higher incidence of death/injury per mile in the automobile versus a commercial airliner.

People forget that 40,000 people a year die in cars and 200,000 are permantly injuried in some way. If the airlines had a record like that, they'd all be shutdown.