Surely, Flybe's niche, as Chillwinston is saying, is to operate routes where a 78 seater might be viable, but a 150 seat 737 wouldn't be. I would guess the whole operation at EXT, SOU & BHD comes under this banner, whereas at BHX, they have the flexibility to increase frequency - which is obviously v.important for key business routes like GLA/EDI.
AFAIK, their strategy is to move towards only 2 aircraft types - the Q400 & the 146. They have talked about the option of looking into 737's at a later date, but imho this would put them in the same league as all the others, and what would be their usp in that dog fight? A q400 has costs/seat/km v. similar to a 737, but half the risk exposure, so I would imagine there must be plenty of routes flybe could look at, and operate daily, which other locos could only consider on a very sporadic basis (what is the point in going somewhere only once or twice per week - like ww from MME - you might aswell just be a charter airline)