Very old news. Delta is removing some if not all the 737-800's in the Shuttle operation and redeploying them to domestic routes and some transcons from Atlanta because these planes have both the capacity and the range and are therefore better utilized on these routes. Also, DL
no longer operates the 727 and the 737-800 is a good replacement for that type.
Delta probably has too much capacity in the mainline right now and therefore chose the 757 for Song because it is a highly efficient aircraft with very low operating costs and therefore well suited for a low cost operation.
The Shuttle from LGA
is very competitive and since 09/11/01 many travellers have shown greater enthusiasm for the Amtrak Acela service. Furthermore, American has entered the shuttle foray with ERJ flights up to 10 times a day to each city.
The 737-300's do not have the same range capabilities as the -800 and are a small fleet type in the Delta system, just 30-40 aircraft, therefore, it does make sense to isolate 12 or 15 of them to Shuttle operations.