All EU legacy airlines/flag carriers began imitating the practices of low-cost carriers a long time ago. I wanna say at least 15 years ago. Probably to do with the fact that those LCCs were hugely successful in capturing market share and many customers preferred them over the legacy carriers. I don't particularly like it, but I can't rule out that if I knew the numbers I'd suggest the same thing.

I do think LH's fares on that particular route (London/Munich) are competitive. Even if you were willing to go Gatwick and use Easyjet, doubt you'd come out ahead most of the time. I don't think Ryanair even fly to MUC, so that's a moot point.