AerRyan,
We have different perspectives on this and you see it through a different lense than I. The fact is that EI while successful are small and need a strategic partner. Technically speaking this needs to come from within the EU to get a 50% shareholding. Hence, all carriers of scale will be no different to BA in terms of competition .
For BA to invest in the model just to curb its expansion or limit there competition on the Atlantic is a nonsense. Firstly in relative terms the EI transatlantic operation is tiny. BA's don't have capacity to satisfy a ramped up demand on their domestic routes as a result of a reduction in EI connectivity via Dublin. More importantly, should EI's transatlantic business suffer significant cuts , EI will struggle, is this what IAG would want? No.
If your vision materialised you can be sure a void would be filled and the US carriers would quickly ramp up their Dublin operations. BA couldn't do much about that ... BA have bigger challenges for the connectivity that KLM offer to the UK regions via AMS to the rest of the world ...