Yes, Popay, certainly interesting times ahead. It is quite alarming to see the situation in Europe and the USA for example, doing exactly the opposite, and with a propensity for LCC type operations as opposed to Full Service offered by the likes of QR, EK and EY.
British Airways is apparently now considering that its European operations will be re-launced with an LCC business model, similar to LX and EI. However, the carriers in the Middle East are developing and strengthening their full service operations, whilst all flying to more or less the same destinations.
If all goes according to plan, the Middle East will have three or four mega-hubs, in the shape of DOH, DXB and AUH, with an endless procession of A380's flying in and out.
I am also quite sceptical as to how long this expansion can continue, UNLESS the airlines start to make flying more accessible to the masses by doing exactly what you said above - dumping fares.
That, in itself, is in opposition to the full service strategies currently being deployed by the Gulf carriers. I personally think that the Gulf carriers will flex under market demand shortly and adopt business models similar to Gulf Traveller, since the travelling public's expectations in the future will be for lower fares.
So, yes, a semi burst bubble.