Mm, I suspect that the shorthaul business-class traveller is not going to return - there's been too much of a change in the industry. The number of people in front of the curtain isn't just a bmi phenomenon - and frankly, in economic terms, can you really justify the sort of price that people were paying to travel in club shorthaul in this day and age? £500+ return to Scotland from London?
Ironically, the top fare for the "frilly" airlines is probably competitive with that of the LoCo's now - which may be the way forward - when people realise that if they travel with a day's notice, they will probably be better off going with bmi or BA than with the LoCo's. I hear that the LoCo's have seen falling yield, with rising load factors for the frillies - I suspect that this is the effect of people looking again at frillies to get ticket prices.
I know that for people who like NS's, things aren't as nice. However, let's suggest some hypothetical figures for a route - these are made up, they aren't based on any documented numbers. Nightstop cost is £70 in hotel bill and allowances per person (note that these are not BA figures, by any means!). Six crew in hotel for lates; six crew in hotel for earlies. Probably additional costs associated with additional engineering and handling contract. You need an extra £420 income over expenditure on the first and last flights just to pay for the nightstop! You can see from this (I hope) why LoCo's regarded having aircraft away from base for the night as a "frill" - how many extra seats sold would that constitute for a LoCo? 10, maybe?