I fear easyJet could be easily wrong footed by Ryanair, who seem now to be on the right track. Ryanair have been talking up 500+ aircraft in 10 years (with easyJet in the 300's), new business/family options, allocated seating and network changes to be more 'business friendly' are all encroaching on the EZY advantage.
No, the two will co-exist as there are subtle differences in their "target markets". There not engaged in a race to the bottom.
U2 introduced allocated seating a while back, it chases business pax, and it serves major airports (it will
eventually will be at LHR).
U2's business model is quite different from FR's, even the new "user-friendly" FR.