I don’t see it that way – I think it would offer IAG an alternative hub for the US. For example people would be able to fly from Birmingham to the US via Dublin, with pre-clearance a possibility as well. Right now I would prefer Dublin any day to the grim experience of transit in T5.
The most compelling logic is that it will clearly take years if not decades to deliver extra runway capacity in the London area, so clearly if the airline is to continue to grow it needs a second hub. I could see this opening up more long haul routes from Dublin, not less.
It may be that the EI model for short haul will come into play, then again BA is steadily downgrading its own proposition (hence CE cuts) and will get there eventually. If it isn’t EI model it will be Vueling model or something else.