I think the big problem with REX is it's owners who think they can do it all on their own with second hand Saabs that are 10+ years old while everyone else is using newer larger equipment.
Will DJ operate turboprops, you really can't rule anything out. Three years ago they were an all 737 operator and now they have 20+ Ejets, plus 50+ 737's. Not one of us 3 years ago thought they would ever operate anything other than 1 type.
There are a lot of pros and cons for them operating turboprops. A big con I can thing of is slots and gates at Sydney. The current terminal cannot take any further jet movements with 3 of the gates now shared with Tiger and if the new finger is added Tiger will most likely be given access to half the gates. With a turboprop they will be able to park in the 'Foxtrot' bays or up at Domestic 4. With regard to slots they number of slots available for jet RPT is rapidly running out.
As already mentioned they a many routes that Q'link have to themselves which could do with some real competition, which the E-jet isn't or wouldn't work.
DJ could phase out the 170's and replace the shorter routes currently operated by them with a turboprop and use the 190's (add a few more) on the longer routes currently operated by the 170's such as CBR-OOL, CBR-TSV, SYD-MKY etc. This would then give them a fleet operating the high density trunk routes (737's), a fleet oprating the long thin routes (190's) and anything under 250 miles operated by a turboprop which is far more efficient than any jet on short legs.