Two points PAXboy:
The pressure was put on Laker when he started his first class "Regency" service as they could see it undercutting their products. They seemed, until then, happy enough with his tourist class ambitions.
Secondly, it wasn't the size of the Laker operation that frightened them, it was the possiblity that it would be a success and grow to the point that it would take their first class passengers away.
Having said that, I take your point that the greater threat at present is that with open skies, a lot more airlines are competing for the same customers.
However, Silverjet can make a profit at just over £600 a sector but they all seem to need more like £2,000 (when not forced to discount heavily to fill their seats).