Arguably BA should have kept Go and let it take over LGW and the regions.
However, it needed to pay down debt to shore up the balance sheet post 9/11.
But I doubt it would have immunised LHR short-haul from the LCCs who have largely converged their products in any event and BA has maintained brand coverage at LGW, albeit with an inferior product than before.
It also has to be said that at the time ceding LGW and the regions to Go would not have been possible without a battle and given what lay ahead (pensions and LHR ground staff working practices) arguably it would have been picking the wrong battle with the unions.