If it became plausible to fly commercial aircraft much lower in the future (due to developments in technology and airway regulations permitting it), say at a standard height of 5,000ft, but with a slower speed - would that prevent / greatly reduce fatal incidents?
In other words, if an aircraft goes down at 5,000ft and 150mph, it's more likely to have survivaility vs 30,000ft at 500mph.
I'd like to answer this question by debunking the premise of the question: that most plane crashes happen when planes fall out of the sky, and that it's like rock climbing where the higher you are, the more likely a fall will kill you. While it sounds believable, it's almost entirely false, and since it isn't diving out of the sky that kills you, lowering the altitude doesn't really help flights become safer.
Planes don't need speeds of over 300 mph/500 kmh ground speed to be deadly. A car accident for comparison is generally considered to be very likely fatal above 80 mph/130 kmh (source: DFT London). Even plane crashes at takeoff and landing speed of around 150 mph/240 kmh can be difficult to survive just due to physics. Every one to three years there's a plane that crashes on takeoff or landing with almost no survivors like TransAsia 235. The most deadly accident ever happened when two planes collided as one was going about 160 mph/260 kmh and the other was almost stationary!
Even if you could easily survive a 150 mph/240 kmh collision, a ground speed of 500 mph at cruise doesn't mean the plane would crash land at 500 mph. Planes don't just dive out of the sky, gaining speed to 500+ mph/800+ kmh (except in total structural failure and breakup, but then you're a goner even at 150 mph). Even in extreme circumstances like loss of all flight controls in UA 232 the aircraft could slow to about 250 mph/400 kmh before crash-landing. The "Miracle on the Hudson" aircraft slowed a lot after engine loss as it descended towards the river. Even the dive of Alaska 261 caused by jammed flight controls could be slowed to about 250 knots using air brakes and flaps. So the actual crash speed for high altitude incidents is usually less than 300 mph even in catastrophic incidents, which you could easily also achieve after an incident at lower altitudes and speeds.
Any serious changes to aircraft have to make enough of an improvement to be worth the disadvantages involved. When we're talking about things like making flights slower, that's a serious disadvantage. Probability per flight hour that an engine or flight controls will catastrophically fail is small but very real number in hazard analysis and so longer flights have a higher chance of an incident. If the cruise portion of a flight takes twice as long, is that portion now twice as safe per minute to compensate?
Edit: As Martin James and Milwrdfan have pointed out, flying lower and flying slower both increase the amount of fuel you need per trip, which lowers the amount of passengers you can take. This would increase the number of planes in the air which would probably decrease safety per passenger as well.
Finally, the most dangerous parts of a flight are takeoff and landing. Nearly half of accidents occur during final approach and landing, and only 10% occur in cruise (source: Boeing). If the past few years are any indication, you're about as likely to have your plane damaged by terrorists as to crash during an incident in cruise. So you're making every flight lower and slower to help less than one accident per year.
Now that this is the accepted answer, I should point out that Dave has some very good points in his answer about the particular dangers of lower altitudes like weather and glide distance.
So in summary, the premise that cruising at 150 mph and 5,000 ft AGL is relatively safe, while cruising at high speed and high altitude is relatively dangerous, is a faulty assumption. So you don't have much to gain by lowering the speed and altitude.
It would likely create a more deadly situation.
In aviation altitude is your friend. Generally speaking altitude in the case of an emergency buys you time to work the problem. Generally you want to be as high as practical for the aircraft in question. Altitude also buys you glide distance to find a suitable landing location in an emergency.
Airplanes also fly high to fly over the weather which is far safer than flying through it at 5000 ft.
Historically airplanes once did fly low and slow (in the propeller days) and there has always been a move to make them fly higher and faster, its hard to quote a direct cause and effect as technology has gotten far better but there is a clear trend that aviation has gotten far safer the higher we have flown.
Perhaps more importantly one of the things that makes commercial aviation attractive is that you can fly far and fast something that is only achieved at high altitudes. The current airway system and technology already permits 150Kt 5000Ft. traffic, just ask any general aviation pilot... but we all want faster, higher flying planes...
In aviation altitude is your friend. Well, that has to moderated: in a non-pressurized airplane, it can also be deadly, due to hypoxia!
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Other answers have explained why height is a good thing. I don't want to elaborate on that, but to focus on one aspect of the question's reasoning.
It's implicit in the question that a falling object gains velocity as it falls, and hence that an aircraft falling from a greater height will reach a greater (and more destructive) velocity at the point of impact.
This however ignores the fact that falling objects in an atmosphere will reach a terminal velocity. It takes only a few seconds for an object to get very close to its terminal velocity in the earth's atmosphere.
A plane falling from a great height and a plane falling from a fairly small height will both, quite quickly, be at similar terminal velocity. A lower height won't make much of a difference.
To add to the several good answers here consider the human implications of slower travel: crews will be at the controls for longer. But tired crews are a significant factor in risk.
In principle you could land to swap for fresh crew (and take on fresh consumables), but take-off, taxi, and landing are the most dangerous parts of a flight.
(You could also carry spare crews, but that represents volume and weight that you can't use for paying cargo or passengers. Similarly the extra consumables required by long flight times will eat (heh!) into the number of seats you can sell.)
In short operating in this way could lead to more danger rather than less.
On the contrary, it would increase fatal accidents. Airplanes require airflow over the wings in order to fly. Once that airflow gets too slow, it detaches from the wing and becomes turbulent. This is an effect called aerodynamic stall. When that happens, the wing loses lift and can no longer hold up the airplane.
From high altitudes, in most airplanes it is normally very easy to recover from a stall and all pilots practice doing this. Simply pitching the nose of the aircraft downward will trade some of the aircraft's altitude for airspeed and the stall condition will be recovered. However, if you're flying low, you don't have as much extra altitude to spare and you're more likely to crash into the ground before you can recover from the stall. So, by flying low and slow, you have much less airspeed margin to work with before stalling and also much less time to recover from a stall should one occur.
In addition to the wings being less effective at low airspeeds, the aircraft's control surfaces are also less effective (and, if you fly too slowly, those can stall, too.) The slower you fly, the less control you have in all 3 rotational axes. This further reduces flight safety by reducing the pilot's ability to maneuver the airplane.
Thus, far from decreasing fatal accidents, flying low and slowly is actually one of the most dangerous things you can do in an airplane.
As far as the question about "going down" from 150 mph at 5,000 feet vs. 500 mph at 30,000 feet, in the best case, this will have no effect on survivability. In most cases, it will make survivability much worse. In the case of the aircraft becoming completely uncontrollable without any possibility of recovering controllability, the situations will be the same, as everyone will die in both cases. There is little-to-no survivability in either case. However, the aircraft suddenly losing all controllability while cruising is (thankfully!) an extremely rare failure mode for airplanes.
Most incidents that happen during cruise (which are already a relatively small minority of aircraft accidents) are aided by having more speed and altitude. As discussed above, the speed keeps the airplane flying and makes it more controllable by the pilots. Altitude buys the pilot reaction time.
Consider, for example, the case that all of the airplane's engines lose power. If you're flying 150 mph at 5,000 feet, you have only a few (maybe 3-5) minutes before you'll be on the ground, one way or another. Since you're only flying at 150 mph, you're unlikely to be able to safely reach a runway much more than about 10 miles away. Now consider the same engine failure, except at 500 mph and 30,000 feet. You now have probably over 20 minutes before you'll be on the ground and you're moving 500 miles per hour. Any runway within about 100 miles is now potentially an option for a safe landing and you also have a lot more time to try to get the engines running again before reaching the ground as well as to alert ground staff to have emergency equipment waiting for your arrival. The latter scenario is much more likely to be survivable. This is especially true if the aircraft is currently flying over rough terrain where a crash landing would not be survivable.
Good answers here already but I'd add, flying lower and slower makes flying more dangerous in that the aircraft is MUCH more susceptible to low altitude atmospheric conditions. If you have ever travelled in a commuter plane at low altitudes on a windy cloudy day you will appreciate how bumpy the ride is.
Flying high gets you up above those ground level effects and as such there is much less stress on the air-frame.
Further, at low altitudes you are far more likely to hit birds or slow moving light aircraft.
Your premise of being higher and faster being more likely to kill you is actually false. It does not matter if you auger in at 150km/hr from 5K or 500km/hr from 35K, you are just as dead. It's not the fall that kills you. it's that awkward hitting the ground part.
Flying lower may make the horrific and terrifying journey to your end a little quicker though, and identifying the remains might be easier.
