JFK-KEF is blocked at 5.5 hours which means it's closer to 5 hours of actual flying time. Why would you overshoot Iceland by 1200 miles, make a connection and then double back 1200 miles for a lounge and lie flat seat when you can be there in 5 hours direct?? I get the loyalty to OW, but sometimes it's just not a fit for the trip.
I know I'm in the minority here, but I do things like that to get me closer to MM status and if the pricing is right. I usually have the time so this isn't a problem for me. If I were the OP, I would do it. I actually enjoy flying (economy or business).