Jet2 had little choice if they were looking for a London base - nowhere else has capacity. Also, Jet2 competes with Ryanair from its northern bases, and will employ the same competitive tactics at STN, i.e. selling package holidays rather than lcc flights.
As Compton says above, it's Thomson and Thomas Cook who are under threat here, although they are accustomed to the competition from J2 Holidays elsewhere.