When I was involved with them (back when they were new) the E Jet seemed like a good idea. The first issue was they just didn't have the legs to do east to west coast non stop and even today the only E Jet that comes into PER comes from ADL.
The E170 was taking good loads out of TSV to CNS, ROK, CBR and from memory they went to the Gold Coast as well. For some reason this was all stopped.
I'd say the fleet mix and engineering was an issue which Godfrey didn't see coming. Back then Virgin we're doing some weird things and I think sometimes emotion was driving decisions more than good business.
I'd say that now if they're getting rid of the E Jet it'd be because it makes good business sense.