Large Jet - bear in mind that not all people have the same wants and desires - it would be a pretty boring world if so!
The low cost carriers, as proven by Southwest, will be used by the budget conscious traveller at all times; and by cash strapped business travellers during downturns. When the good times are here, though, those business travellers and the leisure travellers who have a spare bit of cash who want the prestige or simply comfort level of travelling with a full service carrier will do so.
Remember, this is the first serious economic downturn where we have had the low cost carriers around - following the WN model - and it will be interesting to see if what happens in the States happens here. I'm pretty confident - at least in the case of FR - that they will remain profitable. EZY I'm not so sure about: as you say they expanded very rapidly indeed but they are owned by a family with very deep pockets so as long as they remain committed they should be ok.
At the same time, BA and BD have never been faced with this sort of competition during a downturn: previously passengers really had no choice other than to fly with them or their offshoots and franchisees.
Go, at least in financial terms, was a bit of a disaster for BA - it made pretty substantial losses, though I believe that the sale price may well have recovered those. Go is not really a true 'low cost' carrier - it provides too many frills (which add cost) and I suspect that it may well end up making the same mistakes as Debonair.
Add to this the fact that both BA and BD as full service carriers use their short-haul services to feed into their long haul network - often on common rated fares meaning that the passenger is effectively flying shorthaul at nil additional cost - and you'll see that they are between a rock and a hard place on this one.