MarkD
My ex wife is Greek and I lived out there for 2 and a half years so I think I am also qualified to talk about it and know some of the answers as well as yourself.
Im totally in agreement with you that the Greek Government offering tenders is entirely legal and with the holding of the contracts. However the mentality out there is not of a profit making privatised airline on an equal basis with everyone else. It has more staff than it knows what to do with and you may well have seen photos of the strike at the back end of last year when central Athens came to an almost standstill at the threat of redundancies.
However my response was actually to your comment of who says it has to be Olympic that provides the service. As I said other airlines have tried and failed in Greece and the fact that one way or another the Government gave these contracts to Olympic means in my opinion the islands such as the ones I mentioned plus others would lose their transport link.
I think we probably have a very similar opinion at the end of the day - we just express it in different ways. I would love to see a new domestic airline in Greece operating on some of the smaller routes using DH8s or ATRs - I just think that it is unlikely it will happen as long as the present situation continues to happen.