Personally, I think they ought to keep some differentiation with DY. If they are no baggage, no meals, then they have pretty much become a DY clone in Y.
However, there is room to cut the product and/or generate revenue:
1. Bring back the second light meal as BoB only and extend the BoB to routes up to 12 hours;
2. 9 p.m. and later departures could be BoB for dinner but with a decent (but cheap to deliver) breakfast option - I might not want to eat dinner on the 2135 departure LAX-LHR but once I've had my five hours' sleep (if I'm lucky) I still have four hours before the 4 p.m. landing;
3. Get rid of free alcohol - the US airlines had chargeable booze on TATLs for years although it seems to be back again. This also drives the EI buy-up model with (cheap) wine included in a relatively expensive meal.
4. Offer reduced baggage allowances with the very cheapest tickets - not sure how popular this would really be as a lot of the cheapest tickets tend to be sold to people who are travelling with the kitchen sink - backpackers, once-a-decade family reunions, etc. Baggage could be packaged with upgraded catering, etc. too - but "all you can drink" booze would be perceived as such, and abused.
You can survive a short-haul with no/insufficient catering loaded. If the catering goes wrong on long haul, it will cause significant reputational loss and possibly duty of care issues, so there needs to be a policy that everyone gets *something.*
Also, if catering is 'enhanced' away then there has to be a free option in WTP that is at least as good as the premium option in economy. The second meal in WTP, etc. therefore needs to come back.