Prior to deregulation, Pan Am was prohibited by law from having domestic routes with a few exceptions like JFK-SFO and SFO-HNL. They bought National Airlines to help with feed, but their tote structure, mostly the northeastern US to Florida, didn't help much.
I think actually Braniff might have been a better acquisition. They had a substantial fleet of 727's, and were positioned with their hub at the most modern airport in the US in the middle of the country.
Trying to remember if Braniff merged with TWA ?