The main reason for getting rid of a business class cabin on no-frills airlines is to maintain simplicity, reduce costs from the costly lounges & additional staff required, and to be able to squeeze as many people onboard the aircraft as legally possible. And its worked for Ryanair & EasyJet for nearly a decade, and Southwest for just over three! However, as you mentioned AirTran & Spirit both offer an upgraded cabin onboard their flights, and these are very popular. However, these airlines also offer other traditional airline services like connecting flights & frequent flyer programmes. It works for those two airlines, but I don't know if it would work in Europe, where airlines have to work hard to keep their costs as low as possible.