F.pier - the 717 is a somewhat smaller, significantly cheaper to operate, aircraft than the MD-8x series. The MD-80 is more comparable to the 737-300/-400.
As for economics, I am pretty sure that it is cheaper to operate than the 737-600, but it can't operate over nearly as long a range, which is where it falls down. However, this doesn't seem to be much of a problem. Unless your business plan is based solely on operating the 737, the 717 shouldn't be too much of a spanner in the works.
As everyone else has been saying, airlines will make decisions based on a number of factors, including operating costs, purchase or leasing costs, and ease of integration with the intended network and current operations. The purchase of new 717s is perfectly comprehensible.
"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh