Red Eyed Dog I think you are wrong to place 100% of the blame at NWI's feet.
I have negotiated many deals similar to the FlyBe/NWI one with my airline hat on and these deals are nearly always done on throughput of passengers through the airport. FlyBe agreed to this contractactual agreement so they knew what they were letting themselves into. I have been on the end of a contractual agreement with them on a JEY flight which was so severely delayed I could not make my meeting in JEY. FlyBe held me to my contract and did not allow me a refund. What is good for the goose etc etc.
FlyBe would have received in excess of a £280K rebate for operating the DUB route on basis of an agreed passenger throughput which they were in danger of not meeting. Personally I think FlyBe should have offered rebated seats earlier than they did rather than make a high profile onslaught against NWI at the last knockings of the agreed period.
That said for the sake of less than 200 passengers to reach the cut off figure the NWI airport management are not doing the airfield owners any favours.