I agree they have been doing it in Europe for many years now and it's been successful but the difference is Australia has a large pool of general aviation pilots that Jet Star can recruit from. Much larger than the UK, so the only reason they would run a cadetship is for cheap pilots and cost savings. The Low Cost Model as you mentioned.
Now ... the USA also ran cadetships through various airlines and what the FAA have found was that some accidents could have been avoided if the crew compliment were more experienced. The regulations have been changed back to a full ATPL license for crews in transport ops. The USA has the largest aviation industry and they have done a 180' turn in regards to airline cadetships.
I'm not saying all cadets are bad but when there are hundreds of people in G.A. with experience ready to step up, hiring cadets is not a good idea.