To rebrand British Midland as SWISS would be most bizzare. SWISS has it's own brand and service concept, just like BD has. BD only fly 2-3 routes to Switzerland, how would the mid-haul routes work with SWISS branding. IT's not exactly intuitive that SWISS would fly JED-LHR, is it?
I think the BD brand relaunch was done fairly well, I have my reservations about the oneworld-esque log, but overall the look is good, consistent (for the first time in a decade) and used sensibly. Going back to British Midland was defiantly the right move, I think the public perceive "bmi" as a Lo-Co type carrier.
Midland is being hit very hard by very poor management decisions. In a way LH have no-one to blame but themselves, the deal they had with Bish encouraged asset stripping, brand devaluation and poor decisions - LH and SK simply underwrote losses and guaranteed the Bish a fat cash payout when he got bored. I can understand why LH may have lost patience and is no longer willing to throw good money after bad, but this is a mess they very much helped to create.