Your teaching was right, Fly380, but didn't take into account the spectacularly good deal Ryanair got from Boeing for their 737-800s, which in conjunction with the strength of the market for used -800s at the moment means that FR can effectively sell the aircraft after say five years for the same price they bought them for.
So if the capital costs of the aircraft are near zero, then the route economics have all to do with variable costs. IMHO the "Stansted's doubled its charges" argument is only a small bit of the story (Ryanair? economical with the truth? surely not!). Diminishing returns are playing their role: there are only so many available routes across Europe (from the UK in particular) which will sustain high-frequency service all year round, and most of them have been found already - so Ryanair's having to go after more seasonal routes which only provide profitable flying in the summer months. And whether issues of crew availability or crew hours also play a role here, I'll leave to others more expert than I in the subject...
C.