Most certainly low cost carriers can operate long haul - just don't try and operate both longhaul and shorthaul at the same time.
Laker's Skytrain operation was an overwhelming success - until he put Regency Service on board. It scared the heck out of the big boys who thought he was after their premium pax so they zapped him. Ironically, most business pax steered well clear of Skytrain because they equated it with the great unwashed, backpacking students etc.
The lesson from Sir Freddie is therefore identify your market - and stick to it.
Of course, there's nothing stopping an entrepreneur from doing what Branson has and setting up new companies, each of which have their own identity and business plan, to operate these services.
xyz-pilot is right, though - EZY as it is currently constituted would not be permitted to operate services outside the EU from the UK. Not only isn't Stelios not British, he's not even resident here (he lives in Monaco).