You've kind of answered your own question! Don't forget either that its 2 stops to SYD (BAH and SIN usually I think) whereas all the other carriers will offer 1 stop. It all about competitive advantage really. If GF didn't offer basement prices, then no-one would fly them as you point out the product isn't great, its 2 stops and there aren't many mileage partners etc. Also don't forget the extreme competition from Emirates (mainly) and the up and coming carriers Qatar and Etihad.

And a further general consideration is how much Middle Eastern airlines are supported by their oil-rich owners of course.