Not slow in the head at all, just prefer not to jump to conclusions. I very much doubt nearly 'every single' person flying from BOH would otherwise had gone from SOU, many in its catchment would probably find BRS or EXT a convenient alternative. Also worth noting many of the decreases were on routes not served from BOH too so that could not be the only source.
The latter half of your post I do agree with, if SOU is to broaden its appeal then the airfield needs to be invested in very soon. A starter strip, perpendicular taxiway to the runway from the stand 13/14 area and the already mentioned additional stands would make the airport so much more appealing to many airlines.
I hope now the airport is no longer owned by BAA some of this may actually materialise, and you only need to look at LGW (also 'owned' by various wealth/hedge funds etc.) to see the difference an independent owner can make. While Flybe are an asset to SOU and have been for many years I would like to think that the owners will recognise that with a strong local catchment and good links to London, SOU would be able to handle more than one carrier having a 'significant' operation.
As for bulldozing Eastleigh, well I can think of a few places I'd miss more...