Well, the reason behind that again comes from the economic situation of the local people in Indonesia. Many people there can't afford higher-priced LCCs, so the company can only charge them a very limited amount of money. Because of that, the cashflow available to the company is relatively low, so that they seem to wear and tear the fleet in no time.
Higher priced LCCs? For a starter, Lion doesn't really position itself as an LCC, as it still offers food and drinks for free to all its passengers. Indonesia has only 2 carriers that market themselves as LCC with a LCC product: Garuda's Citilink, and Bouraq-offspring Bali Air (which, incidentally, doesn't fly into Bali).
Most other semi-LCC operators in Indonesia are of the same type as Lion, offering a mostly one-class product, but with food and beverage service for all passengers. As for Lion being lower-priced than the others, may of the other carriers, including Merpati, Bouraq, Adam Air, Jatayu, Mandala, Star Air, BAtavia and others, are often cheaper actually. Yet, Lion always seems the shabbiest of them all.
Far apart from all the others is Garuda, the only real 2 class operator in Indonesia, with mostly higher fares, although its bottom tarifs are virtually identical with many of its lower cost competitors.
As far as 2-class products goes, apart from Garuda, Mandala operates a number of its aircraft in a 2-class lay-out, which is sold as either Business Class or Super Economy class, depending on the route. Lately, both Bouraq and Lion have started experimenting with Business Class, but I have no info as to the exact status of these trials.
In any case, while I wouldn't have trouble using Mandala or even Bouraq, I have serious questions about Lion. There have been several incidents with this company, and it is only their well-connected management and PR
-machine that have made sure that they're still around and that people are still flying them.