The difference between bmi and Caledonian etc is that Caledonian were never the second biggest operator at LHR. That's why it's an issue as far as competition is concerned. Though having said that, the current 11% is far less of an issue than the 18% that it used to be.
Virgin would be stronger with bmi, and vice versa. Bmi needs better branding; Virgin needs better connectivity. It's a marriage made in heaven, and the workers at bmi have known that for years. Unfortunately, the heads of both airlines apparently didn't get on in the past ..... However, whether the investment of time and money now required to make it work is available to either is a different question.