In addition to the non existent compatibility CO found profitable niche markets with their 757`s across the pond and one has to give them a lot of credit for that.
We all know that massive overcapacity is part of the reason why US airlines lose billion after billion each year and why should one force the issue with a bigger plane, if a 757 with a high load is operating with a profit...
On one hand one can always critisize CO for crappy service in Y on interconti routes, on the other hand one has to give them credit to be able to operate halfway profitable and a major point ( talking about ERJ`s ) was to downsize markets to the demand which was real and existing after the techy crash and Sep. 11
It is certainly more expensive to operate an ERJ 145 per pax than a 737 or even widebody plane, but if the market is not there to fly one, one has to bite the apple to use ERJ`s and I think CO is the industry leader ( LCC excluded ), when it comes to smart utilisation of their aircraft, which ia also true for their seat configuration...