I wouldn't dismiss this article out of hand. Southwest is running out of low hanging fruit to pick, which is only natural since they are so big now. Denver will probably work out just fine for them since they will be flying to cities with a large demand for travel from DEN. They will take the leftover demand that cannot be satisfied with the ASMs available from the incumbent carriers. We have run the same number of flights for years from PHX and LAS to DEN as United and both carriers are usually full. That won't change with SWA coming in with a few nonstops.
Look at the CASMs net of fuel. Southwest does have a shrinking cost advantage and they will have to do something different when fuel hedges run out. They can either raise fares (which they do every day, just like Wal Mart does, only they don't ever talk about it) or they can squeeze labor, just like all the other carriers have done.