I think BA
's Concorde only came to Iceland about 2 or 3 times, on day-charters with British tourists.
True, Iceland only has a population of around 290,000 and incoming tourists are somewhere around 300,000 per year. So, it is a tiny market, not exactly making it viable for any of the European or American majors to fly there on a regular basis, as of course, they are not going to make a flight profitable filling it up with leisure travellers!
The 'lack' of majors is hardly due to the Icelandic Govt's regulations, as they are not that protectionist.
Air Atlanta Icelandic is still around, in fact, larger than ever, although due to their nature of business (charter), most of their operations are based overseas, although they still do an occasional charter out of Iceland.
GO did serve Iceland daily during 2 or 3 summers.