A320, I agree with your first paragraph. When tendering for the PSO a stipulation for a hub or a hub-lite (STN) with the caveat a MAN flight would also happen would have been the sensible thing to do.
I disagree with your second paragraph. Either there's a genuine lack of understanding of the investment needed in the roads in the NW, or naivety, wilful ignorance or stupidity with respect the costs. Whichever one it is can I say yet again: the money spent on the airport is minuscule compared to the cost of overhauling (long deserved; longer still needed) the infrastructure of the NW.