DL didn't necessarily fumble SEA, it was doing fine, then now COVID hit.
The DL-AS thing was years ago and both had moved on and probably would've been fine until 4 months ago.
AA is playing with house money, going Lerroy Jenkins on the industry currently, and is more or less taking an aggressive "go big or go home approach" that is either going to position them for success in the post-COVID recovery or have them fail spectacularly. COVID is the biggest black swan event to hit the industry pretty much ever and outside really any typical scenarios that have ever occurred in the past.
Its a chess match, AA & AS want to double-down on SEA now. DL is going to either have to stick with it an play the long gate or cut their losses. The appetite to sustain losses and literally burn money is going to be low and they are going to have to pick their battles. DL can't sustain capacity dumping and yield trashing in SEA, LAX, and BOS at the same time.
One advantage that DL still has over AS in the SEA market is that DL still offers 1-stop connections from SEA through other hubs such as SLC, MSP, DTW, or ATL to some destinations in the Mountain West, Midwest, Northeast, and Deep South that aren't served by AA or AS.
DL could also differentiate itself from AA and AS in the SEA market by adding nonstop service out of SEA to some additional destinations not currently served by AS such as ALB, ASE, BTM, CPR, CLE, COD, COS, DSM, EGE, EKO, GJT, GRR, BDL, IDA, JAX, LWS, SDF, MEM, ORF, PIH, RIC, TUL, and TWF.
DL also has the option of using the A220-100 on routes such as SEA-ALB/CLE/BDL/JAX/SDF/MEM/ORF/RIC that are beyond the range of regional jets, whereas AA and AS would have to use larger planes to serve these markets nonstop from SEA. In addition to DL being able to use the smaller A220-100, DL also already has brand recognition and a FF base in the ALB, CLE, BDL, JAX, SDF, MEM, ORF, and RIC markets.
While AS already serves ABQ, BUR, IAH, ONT, PHL, RNO, STL, and SAT nonstop from SEA, DL could also add SEA-ABQ/BUR/IAH/ONT/PHL/RNO/STL/SAT nonstop service in order to better compete against AS in the SEA market.