I completely agree, zed3, if restricted economy fares are reduced to compete with LoCOs it's reasonable to reduce the frills as well, but if I'm paying £500 for a 1 hour hop, I expect to get a bit more for my money than a cold salad.
That said, there may be little difference in cost between a fully flexible economy ticket and club. I've personally observed a £2 difference on a £400+ fare - my colleague 'down the back' was not amused!