I'm struggling to understand why it was such a sad day for the UK when SZ got shut down, although I'm intrigued to learn more...........
I have to say that it is quite astounding that, despite the patronising tone of your 'teary eyed memories' post, you can't understand this. But please do please allow me to help you learn more. Parts of Devon and Cornwall are not blessed with excellent infrastructure, with road and rail journeys generally taking a lot of time. This means that travel by air has been a very popular option - in 2008 over 450,000 people were using Newquay Airport each year, with the bulk of those passengers carried by SZ.
Imagine, therefore, the consequences for such an area when it loses most of its air links. They are significantly greater than those faced by areas with good overland transport, and Plymouth has lost its airport entirely. SZ services have for the most part only been replaced seasonally by Flybe, with the result that routes like NQY-LBA remain totally unserved although previously very popular. Businesses are far less likely to invest in an area with poor transport links, and by consequence the economy suffers - and therefore the people suffer. That is the ultimate result.
And that is why the closing of Air Southwest was indeed a tragedy for many thousands of people in this country. If you are intrigued to learn even more, I recommend you purchase a copy of
Airline Scams and Scandals (available
here), which documents the orgy of back-stabbing and conflicts of interest fairly extensively.
Sutton Harbour and Eastern were both partially responsible, and it didn't require the most farsighted investor to see that SZ had potential. But instead they shut up shop, at the expense of the Cornish and the Devonians. The south-west remains one of the
poorer areas of the UK, and poor transport will only blight them further when it comes to economic development.