I don't think the failure of BerlinJet should be read as the bursting of the low cost bubble. Which joker thought up that name when they were going to operate an ATR42 and then a Beech 1900 - not a jet (in the sense that Joe Public would consider, in case some wiseguy says that they are TurboProps) and certainly not "low-cost" aircraft (in terms of cost per seat)
However, there are some fundamentals to be answered. Ryanair have managed to cut their costs year on year - most recently by doing 90+% of bookings through the web, thereby saving travel agency commissions, GDS fees, telesales salaries etc. Because of these cost cuts they have been able to reduce their average fare year on year, but how much more can those costs fall and when do they need to ramp up spending to cope with more aircraft, pilots, ops staff etc etc?
easyJet meanwhile have expanded by buying go, but are they gaining lower costs from this? Have they streamlined their total staff numbers or are they taking on most of go's costs.