Gumboil,
You may well be right about subsidies, I don't know, but Manston is geographically isolated with very poor transport and road links and this means that perhaps the average fare charged can be a little higher as it prevents a significant road trip to other airports that might be considered to be close by (LGW etc).
I suspect that Southend has a much denser population close by than Manston may have but those same persons may also have a greater opportunity to use alternative airports such as LCY or STN. It is this threat that may have put Flybe off taking into consideration how their base at Norwich suffered.
Time will tell but I hope Southend does well.It shows good promise as a new base for EZY but for Flybe perhaps Manston offered them the chance to develop a base that would be more defendable, using smaller aircraft. Given how EUJet suffered, it is unlikely that the market is sufficient for larger aircraft and so it suits the Flybe model.