I'm with you there. In the close quarters of an airplane cabin, a firearm's advantage over a bladed or blunt weapon are much smaller than in a more open environment. Allowing passengers to have at least a small blade would ensure that passengers' advantage in numbers would outweigh a terrorist's advantage in weaponry or training.
If there are more terrorists than passengers, the terorists will win (a pyrhic victory). Otherwise, the passengers should overcome.
Bloody, granted, and quite possibly a bit of a free-for-all, but cheap and effective.