Personally, regarding Cityflyer, I think it is an invaluable asset.
If I were a business person working in London and I travelled around Europe on business, as a large number from the city do; I'd certainly stick with one carrier and take advantage of their FF scheme.
So for example someone commutes 3-4 times weekly between LCY and AMS on BA Cityflyer. Then once a month they travel to NYC/DXB/ORD/NRT or whereever on business. Who would they fly with? It sure as he'll wouldn't be Star or Skyteam.
Lucrative passengers such as this are a major part of BA's long haul front cabins and without them many short haul routes, both Cityflyer and mainline, would not be justified.
Just my opinion but as a airlines they need to keep hold of those lucrative premium passengers!