DUB-LDY was PSO but I suspect also allowed for political reasons - but WAT-LON would never be PSO. Loganair also operate CFN-GLA anyway, so they've absolutely no issues with running routes from Ireland to the UK, but only if they make sense.
I believe the extended runway would be sufficient for a weight restricted 738; but FR are not coming back regardless. FR got displeased with the limitations of the ~1800m runway at BFS, they would not appreciate the penalties to operate on ~1600m.