I will jump into the oven here!!
To answer your question-Yes.They can
Should they is tricky.
While a regional may grow and get bigger equipment,thus allowing a legacy to shrink,it opens the door to players the legacy carrier cannot control.
The VX and JB and Spirits and Southwests (or someone newer)will jump on a vacuum from the legacy carriers.
When these LCCs go the extra mile and develop codeshare agreements with foreign airlines then the nicely planned dreams of senior legacy airline mgmt gets shot down fast.
The regionals will always be in competition to the bottom as they try to get contracts with the legacy carriers.As the pilot population at these carriers gets senior and costs go up,they have a harder time cutting costs.
So can regional lift grow at the expense of mainline flying? Of course yes.
Is it a good plan?--Looks good on paper,but reality may be different.
Do I think legacy carriers are going to try this for a a bit more? yes I do.
Right now we have not felt the full effects of legacy consolidation.
NWA-DAL
UAL-CAL
US-AA is coming
then the mergers between the LCCs will start. I can see a JB VX merge which will make some really profound changes in the industry.
İn the end we will have 3 legacy-2 large LCCs, and regionals used to move bodies.
The ideas of these mergers-synergy etc-all hide the fundamental goal of controlling capacity and controlling ticket price/yield.Too much regional lift negates the yield goal. Supply and demand.
Just my 02 ...and FYI,I am usually wrong.Just ask my wife.