If anyone has ever travelled by train in India, they will understand why people are prepared to pay so much more for air travel. Trains in India are ponderously slow and noisy, and the toilets are filthy. The experience is absolutely horrible.
As for the A380 for domestic travel, it is absolutely viable - once the airports are upgraded to take it. 880 passengers in "cattle truck class" is ideal for India for routes between major cities, and they will fill A380s. Japan uses the 747 on high density routes, but there are alternatives like the bullet train there, and the shorter distances make travelling to the airport in Japan less attractive. India has no fast or comfortable alternative, and for the longer distances involved, air travel comes into it's own. People don't care about less frequent flights either, they are used to waiting.