I am sure the ex EZY person is neither mad nor a loony.
Both airlines have their attractions and also things that go against them.
Monarch pilots are, generally, an intelligent bunch and the main complaint about the current disagreement with the company is the way the managing director has gone about it. If someone is happy to sign a contract that is inferior to your own then there is nothing much you can do about it. You are well within your rights, however, to defend your own contract when you feel it is under attack.
If you plan to stay a long time then you will definitely notice the reduction in quality of the contract (less increments, no wide body scale, pension) but if your plan is to use it as a stepping stone then it will not make much difference.
A pilot has the opportunity to gain a huge diversity of experience whether operating day-trips out of base or moving on to wide body operations.
Typical career pattern - start off flying B757 as RHS (possibly moving onto B767 in near future) - gain command on A320/321 flying predominantly shorthaul - in long term, with seniority, command on A330/B757/B767.
Join EZY - RHS for 3 years, flying lo-cost round Europe - gain command, flying lo-cost round Europe for 32 years.
In respect of command then don't believe everything you have read. Some people have just gone on the seniority list only 20-30 slots behind people who have been there 5-6 years. Nobody joined the seniority list for a long time after March 2001. The next joiner was only a couple of months ago.
Monarch has definitely changed over the last few years but there are still far worse options out there.