I think one of the biggest issues around MME is lack of focus.
The name change to Durham Tees Valley was all about trying to get more inbound tourism. In my experience it is quicker to fly to Newcastle if I am going to Durham because of the speedier metro and train links.
I think there is room for both NCL and MME to expand within their catchment areas. You also need to consider the NCL's catchment area has expanded rapidly since EZY's arrival with people coming from Cumbria, Yorkshire and Scotland (it's amazing how far people will travel for a cheap flight!).
As someone said earlier a massive problem is WW's lack of commitment to MME. They don't seem to have grasped the concept that they could expand routes and base more aircraft on a similiar scale to EZY at NCL. I think WW are too focussed on their new base at BHX to worry about anywhere else.
Hopefully, we will see both NCL and MME expand. I certainly hope so given that I travel from both frequently. Competition can only be good for us passengers in finding cheap flights!!