You cannot deny anyone the pleasure of full service if thats what they want. The problem is is that for your average economy passenger on a discounted ticket (which is a large proportion) there is actually not an awful lot of difference on short haul. Which then comes down to snobbery. Again nothing wrong with that, I can be snobby about my clothes. You would never get me wearing primark yet my Armani t shirt purchased last summer has several tiny holes in it. But i guess i admit i'm a bit of a name snob.
At GB they were steadily increasing capacity of both the A320/A321 in line with BA. 168 was the capacity of the A320 by the takeover date. Take into account the added wardrobes and bulkheads and the few extra inches on the first 4 rows (club convertor seats) and the seat pitch is very similar to Easyjet. The 29" relates to the last rows of Easyjet a/c especially on the A320 which is very tight. You can enjoy food and a wide choice of drink (to much choice if you ask me) you have to pay for it but it's on board unlike many full service flights.
I'm not denying that full service has it's plus points, it's definitely how they differenciate themselves, but much of the snobbery is just that.