How much could you charge for those E Jet seats?
E-Jets are quite popular with passengers, or so I'm led to believe. Some people prefer the 2-2 config. For a short flight, I don't see why BA couldn't charge similar prices to those they already implement for the Airbus routes.
If Heathrow had one or two extra runways then I would agree with you, sadly a 98 seat E190 most likely isn't the most profitable use of a very expensive Heathrow slot for BA while Heathrow remains full.
I suspect this is the main hurdle. LHR slots are so expensive and highly sought over that anything less than an A32X is a waste. Even these aircraft are probably a necessary evil (to provide feed) from BAs point of view, I'm sure 777s make even more money!