I think that many of the people that work at SWA are as happy as everyone thinks they are. It is not perfect, but I don't think you will find a company in this country that is. I worked there for 5 years, and I had some great times- I should write a book about it all someday. There can definitely be a "party" environment- the 123 thing doesn't help! Many of the pilots who choose to work at SWA are more of that type of personality than ones who choose to work at a more traditional, conservative airline.
Someone asked earlier what other rewards are given- obviously pay and 123 top the list. After that I would say kick-ass insurance, awesome company and new hire parties, cheap buddy passes...
I had knee surgery when I was a new hire. One day, a large box arrived on my doorstep with a huge wool blanket with the Southwest logo on it and a get-well card from Colleen. After I had my son, a box arrived with real flight attendant wings with his name on them. Maybe all of the airlines do these things- I don't know, honestly. But I think the combination of everything is why everyone seems so happy.