Well in 2006 FGW scrapped the Super Saver and the cost of walk-on travel has become more expensive but at the same time a range of rock bottom advance fares were introduced. I find it no coincidence that trains seem much busier now than they were before these advance fares were introduced. I have also reports elsewhere of train managers saying that the majority of people use advance fares.
It would depend on the journey, for most people FGW provide the local or medium distance service and they would not be made on Advance fares. For long distance travel then I agree, most people can't afford the ludicrous walk-on fares for long distances.
That trains are getting busier of no surprise. ATOC don't want people to know this, and don't want to admit it, but more people are travelling, and there are many 'push factors' away from road travel (such as the high cost of fuel) that are forcing some people onto trains. However the number of people that are forced off trains is far greater than this, and the majority of people who could go by train do not do so, due to the extortionate cost of rail travel and the fact that (rightly or wrongly) people consider only the marginal costs of any journey by car. If the rail fare is £20 and petrol is £18, people will go by car and will not consider the additional costs.
The success of rail is not due to the ludicrous price structure, and lack of flexibility, but due to the increased demand for travel generally.