BA are a bit like the London black taxis, offering a good but expensive service whilst their customers desert them for Uber (low cost airlines).
It costs money to maintain standards but only a small percentage of the market is prepared to pay for those standards. Do they try to lower their costs and head down market to compete or maintain their position for those willing to pay extra ?
Premium economy is a good compromise, slightly better leg room and a few frills for a reasonable supplement to the economy fare instead of trying to charge multiple amounts for something few people can justify on a short flight.