The European airlines want operational flexibility for their regional a/c so seating can be quickly converted from 3-3 configuration in single aisle a/c to 2-2 or 2-3 for peak business demand periods. Some airlines such as KLM do have a dedicated business class cabin (2-3 in the 737NGs.

I flew LHR-continental Europe on last minute fares a few years back. I asked about taking economy instead of business the first time, between LHR and LIN. R/t fare difference between Y and C was precisely GBP 5 - hardly worth the downgrade.