danielson81, one way of looking at this is to reverse the question: Why are direct flights more expensive?
The answer is inevitably - because that's what the market will bear! Of course, it's neccessary for carriers to get as much cash as they can per seat per sector and this is what also works for the indirects. Lufty know how many pax they regularly carry from LHR to FRA and (separate bookings) from FRA to NRT. So if they have spare capacity on both sectors? Make a discount that may not make them much profit but will be better than two empty seats. Then, they hope, you will like the service and use them for similar journeys in the futures.
Lastly, as you often see referred in here, it's proximity to LHR. In this country we are not big enough to have two major international hubs (wait for the Gatwick Groupies to read that slur!) so for many it's easier to go from their local field (MAN/EDI/etc) to AMS/FRA/CDG or even via the Gulf hubs. Folks that live near Norwich hop across to AMS very easily and, if through ticketed, then it can be good deal.