LTNman - there is nothing specifically difficult about the Irish market. Both Aer Lingus and Ryanair seem to do well from Ireland. The problem is that with a relatively small population and 2 significant carrier groups (ie including Aer Arann) there isn't really much room for a 3rd carrier.
Waterford will get a London route when the runway is A319 / B737 capable. Until then, fuggedaboutit