Sounds like you didn't have a great experience with BA. Something else that might be worth considering...

• If BA do get cancelled there are alternative flights they can get you on and you can still arrive into London the same day. With Iceland air, you're talking about tomorrow best case.
• With BA you'd be entitled to generous compensation (£520 for 4+ hour delay). Whereas Iceland Air operates outside the EU/UK so 3/4 of your journey is not covered by EU/UK compensation laws.

Personally, Iceland air are a bit too low cost for me. The extra journey time while everybody shuffles in Reykjavik is annoying. Having to pay for baggage, meals and a can of beer is also irritating.