B737 and B757 share a cross-section, but they have a number of differences like cockpit, landing gear and engines.
Suppose that one were to design a plane which has the cross-section and heavy commonality with A321, but bigger wing, engines and MTOW. letīs call them A322 and A323.
The airplane would be heavier than A321 on short hops - but it would have a longer range, and A323 would have good CASM.
Now, do you think that it would be possible to employ A322 profitably in a manner that could compete with A350?
B757 is loved by VIPs like Air Force Two and VIP charters. It has great range and can use small airports - much better range than VIP 737s. It has smaller size than B767-200. Several airlines use 757 for all-business flights - l' Avion has 90 business class seats, Eos has 48 about first class flat beds.
What their problem is is that they cannot offer a good frequency for the business passengers.
So what about having a schedule which intersperses widebodies with large cargo and economy loads and relatively small business class with medium-haul narrowbodies with relatively big business class, little economy and cargo capacity?