BA Shuttle numbers have declined because BA does not carry so much point-to-point traffic on the Heathrow domestic services anymore, particularly from Manchester and Newcastle.
BA, through the takover of BMI, have re-introduced services from Heathrow to Belfast City, Inverness and Leeds-Bradford.
In addition a lot of the point-to-point traffic from Scotland now goes via London City. BA also operate 767's on selected services from Heathrow to Edinburgh and Glasgow.
I would say that BA's domestic traffic to all London airports has actually increased and freed up space for passengers connecting onto other BA services from Heathrow.