£175 isn't excessively high. You are comparing flying from London City, which is premium business airport, in the heart of the city and on the transport for London network, to southend, which isn't.
You are also missing the point, that Aer Lingus is not competing with Ryanair, not really. They have different business models, and much of the traffic between London and Dublin will be connecting where as Ryanair is all point to point.
In terms of point to point, I expect another reason EI and BA are more expensive (apart from the fact they operate into major airports) is that they have less seats available for point to point ... like I said, different business models.
But, even with all this said, here's the bottom line. If you want to save £65 then book Ryanair and enjoy the service they offer, enjoy the lack of convenience of London City and hope nothing goes wrong. At the same time, as has been seen above, many others prefer to fly with Aer Lingus and BA and that is why both do very well on the route.