No, I assumed the same as you did, ie keep some RJs or 146s for LCY and use a more sensible aircraft for everything else. The point about 717/LCY was to answer another post.
I spoke to a director late on Friday and at that stage, no decision had been taken, so I'm not sure where you are getting your info from. From what I was told, there is a long way still to go with this... but hey, who knows apart from them wot are involved??
I'd certainly be more than happy with a 717 from a piloting point of view, so I hope you are right!