Proplinerman
The 50% reduction probably applied to direct operating costs (fuel, maintenance, etc). At the time airlines had very high overheads (sales offices, station costs, general admin, etc). I was told that as a rule of thumb they added on 100% to DOC. Hence the reduction would only have been 25%. (I'm told that's one of the reasons the airlines got their sums wrong with the 747.)
It probably also assumed that passengers would be indifferent to the type of plane. Its long before my time but I'm told that the VC10 had higher operating costs than the 707 or DC8 but that it was more popular with passengers & had higher load factors (although its main operator BOAC never made much money). Doubtless the jets would have achieved higher load factors (yield was less important of those days of IATA agreed fares) than a prop.
With fuel costs increasing 50 seat regional jets are becoming uneconomic. The obvious solution is larger regional jets (DL is replacing many with 717s) but for feeder flights to small airports, particularly where there is minimal completion we may well see a return to prop jets.
As a matter of interest Pan Am (mainline, ignore their commuter carriers) never operated a turboprop going straight from piston aircraft to the 707/DC8.