If "they" wanted to consolidate at Manchester- there is always the compromise of operating W pattern flights from MAN or overseas based aircraft into Liverpool.
On the subject of discounts to easyJet & Ryanair I'm sure Jet 2 & TUI would have something to say about that. I doubt it would be feasible to maintain an airport the size of Manchester without income from landing fees. There is a limit of how much you can rip people off with drop off charges and how much Duty Free you can flog, often at a higher price than regular discount shops.