I have to say that I would e avoiding the 737's for any trans-Tasman flight. As you noted, they are way inferior to the 767 for the same price and route - even in Y there is a big enough difference for me to avoid them for a trans-Tasman flight.

In fact, the longest flight I would settle for a 737 is BNE-MEL at under 2 hours. But I am happy now that some of those flights are operated by 767 aircraft (used to only be 737's). I would also avoid them on long domestic flights like SYD/MEL/BNE-PER.

The 737 business class seating is not an international standard product. It is confoigured for Australian and NZ domestic operations rather than international ops as a MEl-CHC flight is.

Of course the problem is that people want to travel on the thinner routes with reasonable frequency, meaning loads are suited to the 737 sized aircraft. And then they can reduce operating costs by using JetConnect and NZ based tech and flight crews. This results in lower costs for QF, but as you say they charge the punter the same amount no matter what type is flying the serving.