The concept is very similar to when Mariucci switched the student seats from assigned to first come first serve. There would be seniors who would get the good seats, not show up until partway into the game because they would be at the bar, and then we would have to start the game with good seats empty. When it became first come, first serve, the most dedicated and loudest fans filled into the lower seats and we had an intimidating atmosphere heckling the other team during warmups. The analogy is that if the lot opens at 5 AM, then the people closest to the stadium will be the people excited enough about the game to get there at 5 AM, and there is a grilling tailgating party going on for 6 hours before the game that will grow outward as people show up. That is a much better atmosphere than some scattered fans of dedicated people who show up early (such as UnitedWeStand) amongst a lot of people who just use the spot as a convenient and close parking spot at 15 minutes til kickoff.
As for the revenue thing, we will lose revenue on the spots themselves in the short run, and if sacrificing the atmosphere for that revenue is what we want, then we can't complain about the atmosphere we get. I think in the long run, having the better gameday environment would result in more overall revenue from increased attendance and concession sales.