LTNman's case is that the regulators know best - how many passengers can comfortably be accommodated in the terminal, that elected politicians are the best people to decide on matters of passenger comfort.
I'm afraid I disagree, and I'm more in sympathy with Pabely's approach. Let the market decide. Passengers know what they will put up with in return for low fares, not the government. If the airport was privately-owned, which it should be, the owner/operator could decide how much to invest and when. If passengers didn't want to use the facilities, or the airlines felt it didn't satisfy their needs, they would go elsewhere.
At present, Luton Council's residents are paying, through reduced local services, for the lack of business acumen of their local councillors. Surely that's indefensible. The question is, are they bright enough to vote for another party to manage the council's business interests? I suspect not.