"Hate the game, not the player."
"It's not what you know, it's what you can prove."
We as pilots tend to be awfully backward looking and nostalgic about the "good old days". Those days are over, and have been for decades; deregulation was designed to give choices to the flying public, not to generate wealth for pilots or even for airlines. The downward spiral was sealed at that time, and 9/11 merely accelerated the process.
I'm not a big fan of having to compete with ultra low cost start ups ad nausem, but I'm afraid that's the world we live in. Virgin America is under incredible scrutiny, and they are following the letter of the law by all accounts. No one has to like it, but the reality is that they're here to stay as long as someone continues to [legally] bankroll the project.