Business travelers use EDI because it's a much better option. There is no business case for subsidising this route, less so if it ends up at Southend-on-Sea. PSO routes were intended for marginal routes to outlying communities with limited transport options.
Dundee has easy access to Scotland's largest and busiest airport, where fares are much lower and frequency is much higher. DND is to EDI what PIK is to GLA, and I don't mean "complimentary".
Demand is going backwards as EDI grows, remember ScotAirways flew DND-LCY on a commercial basis during harder times in a smaller economy, the growth and wider options at EDI mean DND has no pressing need for a commercial airport at all, never mind one propped up from the taxpayer.