"Lounges take up space " true but in most airports they're tucked away either just under the roof or in the basement and some distance from the Shopping Mall. I doubt they'd be otherwise used for anything that generated the amount of cash they take off us for a Business Class seat.
I gave up on LHR BA T5 lounges years ago - as you say they're shabby and packed - we also use the F&M counter but that is often packed solid