Well, good news for DND in that it probably secures the airport for the short term. However beyond that the jury remains out - STN may well be cheaper to operate into, but the flip side is it's much less convenient. Even biz pax who currently use the existing LCY service may well feel they're as well going from EDI when faced with the STN express and the fares appear to be too high to tempt more price sensitive pax to replace them. LCY struggled to attract pax at high fares, I think STN could struggle even more.
Imo the only way we'll get a sustainable service at DND is if they can get a larger aircraft in to increase the volume and lower the fares, but I can't see any airline who'll come in and do that.