Spokesman Stephen McNamara told the newspaper that the €1/£1 charge would apply only to flights of an hour or less, which would include almost all Ryanair routes between Ireland and Britain.
I doubt the legality / regulatory-compliance of this in general, but if a person were to buy food or beverages during the flight, they must have free use of the toilets (EU law).
A premises selling food and a drink, having a minimum number of seats, (189 is certainly above this minimum), must provide free toilets for customer use.
I know many business do not respect this law all across the EU, but I'm sure authorities would enforce it for a large pan-European airline!