The big fall of BMI is lack of long haul connections at LHR. I think you're all being blinded a little. If Virgin do gain BMI, there is actually better chance of a success story than an IAG merger. Virgin has its on financial muscle behind it. The beast created by the merger could be quite a substantial one, which stands a fighting chance against BA. Strip away a lot of the med haul stuff and connect where needs to be connected from LHR to eastern and central Europe and integrate a much bigger long haul beast due to the access to slots.
I would say Virgin has a good chance of turning BMI around in two to three years. They just need to suck it in for a while.