This might just be a US thing, I don’t know. But it seems like if I want to fly somewhere, the cheapest option is to choose the nonstop flight. If I pick a flight with a layover it always costs more.
I don’t think it used to be this way! Flights with stops and layovers were cheaper because of the inconvenience. What’s the point of picking one if they’re more expensive?
I’ve noticed that anecdotally as well. There are a lot of good points already listed in other comments, and I have a couple merely additive points.
On an individual passenger basis, direct flying has always been operationally cheaper if both options exist, because it’s a more efficient use of resources. In practice, financial efficiency also requires keeping all flights as full as possible, so it was maybe helpful for an airline to incentive a customer to keep hub flights full by pricing connections lower than a direct. The direct flight is arguably more valuable to a customer because it’s a better experience, so it can cost more. All three flights are going to fly anyway, so making the sale is most important to the airline.
But equally or more important, the overall volume of air travel passengers has grown enormously over the past several decades. I’d bet that many direct routes didn’t used to have enough pairwise volume to run a regularly full profitable flight, let alone multiple competing direct options. Now I expect a ton more pairs of cities to make economic sense.
Looking at it another way, that increased travel volume over decades also came with larger airports to support more total trips, and each of those new flights need to go somewhere. Airlines can add more options throughout the day to cities already served, and they can add new cities. They naturally choose both, therefore more direct routes are created. As more direct routes have supporting volume, the inefficiencies of the hub and spoke model dominate the bottom line.