Because Jet2 were filling their aircraft with 'packaged' holidays
And Easyjet were filling their aircraft and increasing yields at the same time. Theres a reason why the I.T market has been left with just 2 major competitors + Jet 2. Margins are tight and the market very competitive.
Now I'm not saying for one minute that Easy have made the wrong move launching the holiday brand but people are putting too much emphasis on it IMO. As others have said, it is first and foremost an extra ancilliary revenue stream from a 3rd party as opposed to taking market share from Jet 2 or anyone else for that matter.
This is about to change as you will see. That's why they are in talks