But why not just develop such a hub in Stansted, Dublin, Bristol, Birmingham where you have a larger local population?
Because there's no US pre-clearance facilities at any of those airports! The advantage of having the pre-clearance at SNN is that airlines can fly into any US domestic airport, the same cannot be said for STN, BRS, BHX etc. That's the sole reason why I'm suggesting the low-cost hub idea for SNN. In the absence of pre-clearance, it would of course make more sense to develop the hub at an airport with a higher local population.
Pre-clearance is't such an advantage is this set-up. What's the idea? You get off your Hahn - SNN flight, go up to the pre-clearance area, board your SNN - Buffalo flight. What about when your Hahn - SNN is delayed a bit, and you're rushing to your SNN - Buffalo flight, which then you miss due to having to pass through preclearance.
If you miss a connection at any hub due to the inbound flight being delayed, the cause of missing the connection was not what happened at the airport in question (having to change terminals, pre-clear etc - time will have been allocated in the itinerary for these), but due to the fact the inbound flight was delayed in the first place.