Roverman, I think your assessment is in the main well thought through. Yes, it is a worsening situation for those who live in the Manchester area, but for everyone else, locos have been beneficial. I use locos to European airports to connect with long haul. Not only can I use my local airport, I can actually save money, as they are not true interlines, I only pay european air taxes. Ok, you have to check in again, but that offsets the original hassle of having to get to Man or a London Airport in the first place. (Incidentally I made additional savings from LPL to LIM via MAD as the flight timings meant that I saved additional costs for a hotel in the London area, - Man was not an option in this case)
Overall, locos have certainly been beneficial for myself (and millions of others by their success), but you are correct in that long-haul has suffered partly as a consequence. For various reasons Man had a near monopoly of services from the North, but there was no possibility that this would continue into perpetuity, but the rapid growth of Locos appears to have caught Man unawares, and their anti-loco initial stance cost them dearly, although I appreciate it was to defend flag carriers.
Man is now a different beast. Instead of the previous policy of trying to strangle all competition elsewhere at birth, which to be fair worked for many years, they now need to maximise their strengths. However the impression given is that they are desperate for anything anywhere which I am not sure is the best model for MAN.