I think your post is well considered but seems to be taking an all or nothing approach.
I don't think anyone is arguing hubs will disappear. As I wrote above the argument was about where the growth would happen, not if hubs would disappear.
1) I don't think prices from smaller airports will always be high. Smaller airports often have lower costs because space is available, labor is cheaper, and the airport is willing to keep prices low to get more growth. Airlines looking for growth look for emerging cities to place new routes. The BA 787 LON to CHS and AUS examples above show that.
There are always going to be outliers, and this is one example. British Airways though operates from one of the most slot constrained airports in the world, offering a non stop route to what are some smaller airports in the US. It has nothing to do with aircraft type because these are routes that could have been done with a smaller wide body, say the A330-200 or the A330-300/900.
Flying non stop is also often cheaper to operate because, well, you pay a one time landing and take off cost, you are not taxiing two times thus if the stage lengths are not huge, it is cheaper to operate than a connecting itinerary. That said, airlines, and businesses for that matter, do not drop prices unless they are forced to. In aviation, the trigger for this has always been competition, or the threat of competition.
2) Maybe the legacies "always" charge more for nonstop, but I've seen WN charge the same or negligibly different fares for non-stop vs 1-stop.
They are a low cost carrier. Their entire business case is predicated on being cheaper. Plus their operating model is planes come in and go out, not the banked hub method that is higher risk, higher reward.
3) NB vs WB size to me is a non-factor except perhaps for the smallest regional jets. I think it only takes one CR1/CR2 flight for a tall person to decide to book away from them, lol. Other than that, I think the other main priorities, price and convenience, overwhelm any concern of NB vs WB for the large majority of passengers. The market is buying up A321XLRs with 4300 nm brochure range so they're voting with their money that customers will accept NBs for TATL+ flights.
They are going to maybe fly them to smaller airports. You are unlikely to see big airlines replacing a wide body jet at Heathrow or Schipol. You are likely to see more routes coming in to say Gatwick from a smaller US airport, or headed to Orly.
If there is a direct replacement, you will see the A321LR/XLR replacing the 757, and with time, as more airports become more slot constrained, the ability to add more capacity comes from simply flying a bigger jet.
David Neeleman is willing to put his money and prestige on the line to start an airline that is doing the opposite of what you suggest: point to point between smaller airports using long range narrow bodied aircraft.
Again, hubs won't disappear, but it seems to me the airlines are voting via their spending choices to buy equipment for more point-to-point and hub-to-point flying.
Yes, smaller airports. But this does not necessarily apply to huge airlines operating from hubs. Emirates might have demand for the A380 on a 1 hour trip, Cathay Pacific may have enough demand for a 777 on a 3/4 hour trip, Singapore Airlines will fly a 787-10 on a regional route, Turkish Airlines will fly WB's from Istanbul to LHR. The economics differ from market to market and even in the same market, airline to airline.
Plus, operating a hub system tends to make sense because you need fewer jets in what is a high capex industry, and an industry where established players especially in the US will fly smaller jets into busy airports to simply block new competitors from accessing the same.