Hi ViajeroUK –
The full meal service is possible on domestic flights. Remember BA’s Super Shuttle in days gone by ?
But the issue of biz class seating within Europe has been endlessly discussed in these pages.
As you say, it’s all to do with the lack of flexibility plus, of course, the fact that the national airlines make little if any profit within Europe. In fact many of their feeder routes are hived off to secondary carriers.
In fact the way things are going, the LCCs may be operating some feeder routes in the future.