I wouldn't doubt that 146 costs are higher per seat-mile than, say, a 717 or a 737. That said, I think sometimes people get caught up in the myth of aircraft costs -- reality is, direct aircraft operating costs aren't the majority of the airline's net cost.
Southwest, for example, was built and thrives on doing things one could consider "wrong" -- flying 737NG's on short hops. Yet most, if not all, airlines would kill to have WN
's operating costs.
As others have pointed out, it's a question of total cost, and total yield. The airplane's not an impassable hurdle.