Yeah, CX should do that a long time ago. In fact, Cathay's aircrafts are too big for regional service if the SE Asian regions do not have a good load factor of aircrafts. In SE Asia, it does not like N. America, whereas driving, long distance bus or trains are able to replace air service. For example, if someone took a cruise ship from HKG to SIN, it would take a long time and very costly. This make Asian airlines big and comes with a high fare.
IF CX sets up a regional airline, it would have direct competition with DragonAir then.
In my opinion, some routes like HKG -- Guangzhou should be flew by regional jets like CRJ rather than a 767. The load factor of the 767 is low and the loading/unloading time is too long for business travellers. Everybody just shift to high speed train instead.
Also, regional jets do not reruire jetways, they only have to put some place around the terminal and put several regional jets at the same time. Then, the CRJ has their own ladder for passengers to get in and out. This would offer an express service for all passengers from HKG.
I would love to see Bombardier gets the contract and I hope A380 would be able to take pictures when they are in production.