I was once told the #2 station in LA made no money on overnights. It had someone working there because it was a better lead in for the morning show than dead air, and, in the off chance something went wrong, the station could probably be brought back on-air before the morning show had to deal with it and potentially lose revenue on spots.
Having been involved with what was usually the #1 station in LA in the last half of the 90's and well into the next decade, I can say that overnights never made any money... not even enough to pay the overnight jock.
I also programmed what was the #1 station in overnights in the late 90's...beating even KFI. No revenue except for a few PI home remedy accounts.
I managed, programmed, consulted and for some time was sales manager of #1 stations in Puerto Rico for about 35 years. Never saw any significant revenue from overnights, even when I tried to do packages aimed at very specific revenue categories like career schools.
Same experience with leading stations in a handful of countries in Latin America.
You are correct. Being on 24/7 was much better back when equipment was less reliable. It was that "it won't go on the air" call at 6 AM that scared us all into staying on overnight.